Digital Real Estate - Anyone?


#1

Dear Mustachains,

In my quest for finding passive income options I have stumbled upon something that many of you might consider obvious but it was totally unbeknownst to me until last week. Digital real estate or, better explained, the art of website flipping (buying websites, improve them and then sell them again at a premium). So far I have found two websites, Flippa and Empire Flippers where literally thousands of websites are listed for sale. What intrigues me about this investing opportunity:

  1. You can do it from home (I’d love to join the laptop business generation)
  2. You can learn with minimum investing (there are websites for sale at less than 1000$) and then scale up
  3. The yield of healthy websites is somewhere between 20 and 30 (20x monthly income=selling price). However, the one in need of TLC are sold at 10x yield. This means that by improving your website you don’t only increase your cash flow but also the overall value of your website.
  4. You can improve your skills gradually and some of the websites appear to require minimum maintenance
  5. You can keep your 9-5 job

I think I’ll be looking at this for the next weeks but if any of you have experience to share it would be great. In particular I have two questions on top of my mind:

  1. What would be the best legal set-up for a small company doing this kind of business in Switzerland (Gmbh, individual company, etc)?
  2. What would be the best form of income source for a truly passive, low maintenance income stream (affiliate, adsense, etc.)?

iamaneye


[Guidepost] to the Swiss Mustachian Investment Forum
#2

Hi,
Be very careful with flippa, it is full of scam. Empire Flippers is serious and does a lot of due diligence but they are more expensive (websites are of better quality but also they take 15% of the price).

Concerning the legal set-up, please never ever do any kind of business as an individual company. If something goes wrong they can take everything from you, you have unlimited liability. At least create a GmbH/SaRL. The drawback of course is the capital requirement (20000 if I am not mistaken).

Cheers,


#3

Ciao Dago,

it is indeed true that Flippa is more like a street market while Empire Flipper is like a high end boutique. I have been checking Flippa’s offers on the low end (<2k) and for every 10 rubbish sites there seems to be one worth its claims. However, still to be investigated. As far as individual company vs. SaRL I agree with you that a SaRL is way better for liability. However, it is not ideal to run some early stage experiments due to its higher complexity. I was thinking to start off with an individual company, learn my ropes and then establish a SaRL. Do you see high risks in this approach? Keep in mind I’ll start buying a 1k-2k website, with a cash flow of 100-200USD/month.


#4

Hi iamaneye,

I am sure that there hidden gems on Flippa. It seems that you are well aware of it and this is what matters. I did not want you to rush and buy something there too fast.

Concerning the SaRL, if it is to buy such a small site you are right that you might be better off just doing it as an individual. The risk might be linked with the type of sites. If it has customers then they could come after you. If it is just a CMS with ads, I think that it is pretty safe.

Good luck !


#5

Mildly off-topic, but would it be possible to create ones own website and monetize it using Adsense without declaring a company? I assume it would be so called “nebeneinkommen” for tax purposes?


#6

Hi Revoil,

I started thinking the same thing. Especially in an early phase of the project, with small websites/cash flows it would be really easy if no company had to be declared. Later (when exactly?) one could decide to transition. Unfortunately, I can not find much info on the web.


#7

Hi @iamaneye,

I am curious to see if you finally made the leap. Did you gain any other insights on these websites?


#8

To be honest not. Too much work needed in the set-up phase for me. I think it is a cool way to have some almost passive income but I believe that a software developer would be in a better position to start off. Maybe some day I’ll come back to this topic…


#9

You better start developing your own stuff/site instead of buying some scam. Are you a developer? Maybe all developers here can unite to make something.

I have at least 3 project parked that might be worth pursuing. :slight_smile: