With thousands of websites listed for sale, how do you know where to start when it comes to buying websites on Flippa?
With over 15 years experience in buying and selling websites, Matt and Liz Raad have done extensive due diligence on thousands of deals. And you may recall, Liz recently shared the 3 costly mistakes she’s seen people make when it comes to buying websites on Flippa.
Today, Matt joins her to share 5 more must-see tips for beginners using Flippa to buy websites for profit and passive income.
Watch the video below and start creating your portfolio of income-generating assets with more confidence.
Liz Raad: Hi. It’s Liz and Matt Raad again, and we’d like to do part two. I’ve called Matt in because I want to do part two of the biggest mistakes that beginners make when they’re buying websites on Flippa.
Flippa’s an exciting marketplace and it’s huge. There’s so many websites on there to buy, and online businesses. So we want to keep you safe. We want to give you some ideas about how to get on there and be successful.
Matt Raad: We have seen it all over the years. We’ve made lots of mistakes ourselves. But more importantly, I’ve done a lot of coaching with our students over the last decade. So, I said to Liz, “Let me share some experiences here with our audience.”
Tip #1 – Have a Clear Search Criteria when Buying Websites on Flippa
Liz: Okay. So let’s start out with that idea that Flippa is a big marketplace. There are thousands of websites and domain names listed on there for sale at any one time. And there’s more coming on all the time… So how do you choose?
This is one of the big mistakes that people make is that they get onto Flippa. They hear about us or they hear about, “Oh, you can buy a website,” and they jump onto Flippa, but it’s just overwhelming. There’s so many to choose from. How do you know which one to pick?
The first thing that you need to do is to create yourself a search image. It’s like targeting, similar to when you’re buying a property. You have a certain style of property that you are targeting and you don’t need to look at every property for sale. Then you only need to look at the ones that meet your criteria. I think that’s really important. Having that search image about, “What do I want and what does that sort of website look like?”
Matt: And if you want to get a bit more background on it, I suggest that you take a look at our free masterclass training. That’s exactly what we talk about in the training, and what the whole masterclass is about. We break it down into the type of websites that we actually look for and understanding our strategy too, because that determines the type of websites we look for.
We’re not on Flippa looking at absolutely everything. We’d be there for days or weeks on end. We basically go for content sites. We’re not buying e-commerce, and there’s a whole lot of other sites we’re not buying either. But if you want to learn more – check out the masterclass, and you’ll see our strategy there.
That is a big one. We do see people get so overwhelmed when they get onto Flippa. What do I buy? Well, just go for this:
Set yourself a search criteria (i.e. a checklist) of the stuff that you look for, and start out small. Just buy the smallest sites under $1,000. Get to learn the ropes.
Tip #2 – Communicate with the Seller when Buying Websites on Flippa
Liz: Now once you actually get into really looking at websites and you’re starting to click in, (and you’re doing some due diligence and asking some questions etc.), that’s where mistake number two comes in. We see a lot of people trying to do this without ever communicating with the seller. They’re not going in and actually finding out – Who is this person? Why are they selling? And what’s happening?
Now, admittedly, in the very small websites for sale (and the starter-style sites), maybe that’s not so relevant. But certainly, once you get up towards $1,000+ websites, you really want to be communicating. And definitely once you get over $5,000 to $10,000+ websites.
Matt: If you’re into a $50,000+ website and you haven’t communicated with the seller, that’s not smart website buying. It’s so easy these days. You can privately message them. Or ideally get on a Zoom and have a chat to them about the background of their website and everything that they’re saying about it.
You pretty much have to do this. It’s a good skill to learn, particularly if you want to get into this and do this professionally. If you’re buying much bigger websites that are worth $50,000 to $100,000+, you need to be talking with the seller.
Liz: Or talk to the broker. Sometimes you won’t get the seller, you’ll get the broker instead and that’s okay. But you should be having a dialogue with that person and finding out more.
Tip #3 – Don’t Always Believe the Good Word of the Seller – You MUST do your Website Due Diligence
Liz: That leads us into mistake number three.
Matt: This is one of the biggest mistakes, and what I’ve seen a lot with our newer students. This mistake is believing the good word of the seller.
Liz: Yes, just looking at what’s been written in the listing and just assuming that’s correct.
Matt: You have to do your own due diligence. You’ve got to learn how to do website due diligence. It’s just so important. And you’ve got to be speaking to the seller.
Liz: You can’t get caught up in the “It’s too good to be true.”
Matt: When I think back over the years that we’ve been coaching people, and where people have actually lost money. The details come out when I go through their website due diligence checklist. We provide a comprehensive due diligence checklist in our course.
But I’ll say, “Show me your due diligence.” And they’ll respond “I can’t, Matt. I didn’t actually do it.” And I go, “Well, why not? You just spent a lot of money on his website. The checklist would have picked up this, this and this..” And they go, “Oh, no, the website looked good and the seller told me it was a good website.” Well, everyone’s going to tell you their website’s good. It’s just like selling any business.
Liz: Remember, we come from a business broking background and it’s the same thing. Of course the seller of the business is going to tell you all the good stuff.
Matt: Yes, and it’s good, but there’s always some skeletons. I don’t care what anyone says. Any business or website that’s for sale will have some skeletons of some kind.
Typically, that’s the turnaround opportunity, but don’t just blindly believe the figures. A website says, “Hey, I only work three minutes a year on this website and make $50,000 a month off it.” I know I’m being a bit over-dramatic there, but I have seen clients do that. They just read the headline of the list and go, “Wow, this is just so good. I’m buying!”
And in all fairness, the reason why is, it’s really exciting. You get onto a reputable website broker like Flippa and you look at the listings and go, “Wow, this is so cool. There’s a website selling here for $20,000 and it makes $2,000 a month net profit. That’s so cool.”
Or you start looking at the bigger sites and you start thinking, “That website is passive and it’s made more money than I earn in my job going to work 9:00 till 5:00.” So it gets pretty exciting. And you are definitely tempted to believe the good word of the seller. But you want to be sensible here.
Following your Website Due Diligence Checklist will help you with the Questions you need to Ask the Seller
Liz: We need to ask some questions first and do some research.
Matt: You need to check everything out. Ask the seller questions. And it’s pretty easy once you know what you’re doing.
Liz: Yes, and those deals do exist too. We have students out there who have found some awesome bargains.
Matt: You can read them on our website or on the Matt & Liz Raad YouTube channel. You can some of our successful students, such as Mark and Lisa.
Liz: So, we’re not saying these deals don’t exist, but just remember to ask. Make sure you ask them questions and don’t just jump straight in and buy based on what’s just listed there. You do need to ask them questions.
Tip #4 – Keep Yourself Protected by Keeping your Website Purchase Transaction on the Flippa Platform
Liz: We’ve been working with Flippa for over 10 years now. They’re awesome, and there’s been lots of developments on there. And a lot of that has come from feedback from our Digital Investors community.
Matt: That’s right. Flippa will come to our live events and there’ll be 500+ students there, and they’ll take feedback from our audience. They’ll talk to our students, especially beginners, about what their concerns are working on the Flippa platform. And over the years we’ve seen Flippa implement some really cool stuff, particularly for beginner website buyers.
And one of the big areas of improvement is security. In other words, being secure and knowing that when you’re on their platform, you’re buying a good deal. Because obviously we’re buying a lot smaller websites when we’re starting out on Flippa.
Keep all your communications with the seller on the Flippa Platform
Matt: With other broker platforms, they’re curated deals. And by their very nature, there tends to be a lot more security there. But with these smaller websites (especially in the early days), what people would typically try and do is take the deals off the Flippa platform to avoid the commissions etc. But that’s the number one thing we recommend you DON’T do if you’re a buyer. Why? Because the minute you do that, there’s no protection for you.
Liz: Yes, you don’t have that record. Because what you’re communicating in the Flippa platform, there is a record of what’s been agreed to. It is a Contract of Sale.
Matt: Yes. It’s like a “Virtual” paper trail, basically.
Liz: And everybody knows what’s included, and what’s not included. When you do have those communications with the seller – don’t go off the platform. Even if you do a Zoom call and get to know the person – ideally you would write all that down (what was covered in the Zoom call) and put it as a message in the Flippa platform. That way, everything you’ve spoken about and agreed to is all documented.
Flippa’s Security Measures on their Platform are Designed to keep you Safe
Liz: Like Matt just said, dodgy sellers will try and take you off platform to avoid the commissions etc. and stop that paper trail. So as a beginner, it’s really important not to be tempted to take it off platform. Stay on there.
Again, Flippa’s implemented not only more security measures, but they also now have Flippa escrow for your website payments (which didn’t used to be there) and also a really good messaging system.
Matt: Yes, and a good ranking of sellers. So Flippa are really big now on grading sellers and verifying sellers. So if you take it off the platform, there’s no comeback.
Whereas if in the unlikely event there is a problem with the website, there’s recourse there. If you think something untoward’s happened, then the Flippa team can investigate for you. If you’ve taken the deal off Flippa, there’s absolutely nothing they can do.
It’s the same with all the other brokers as well. And obviously we are biased. We’re ex business brokers ourselves, but we know the power of a good broker – keeping things safe for both the buyer and the seller. And that’s why we’re personally big fans of always using a broker (or an intermediary) that you trust.
In this instance, when you’re starting out buying websites, the Flippa platform works really well for that. And so it would be a mistake to be taking deals off the platform.
Tip #5 – Never Give Up When Buying Websites on Flippa – There’s Always Good Deals to be Found!
Liz: Now we’ve got one more tip, which I think is a really cute one, because we often get these emails, and it’s really funny when we do. We’ll get an email sent to our support team and it’ll say, “I can’t find a deal. There’s no good deals on Flippa.” And literally within an hour or two, we’ll get a student email and say, “I just found the best deal on Flippa!”
Matt: I always find it funny how the universe works. It is literally within a couple of hours. And there’s several things at play.
Liz: The mistake here is giving up too soon. People go on there, and think, “Oh, there’s nothing. This is all rubbish.” Then on the other hand, there’s all these people who are finding fantastic deals.
Have You Really Tried….Everything??
Matt: It reminds me of a Tony Robbins story. We were right into Tony Robbins way back when we started out in business. And he was relaying a very similar thing where he had a client.
The client was complaining, saying, “This isn’t working. I’ve tried everything.” And Tony says to client:
- “Tell me about everything. So you’ve done a hundred things in the last month, have you?”
- “No.”
- “So what? You’ve done 20 things in the last month?”
- “No.”
- “Have you done one thing?”
- “Yeah, I’ve done one thing and it didn’t work!”
That’s the same concept here. With websites, you literally don’t just walk straight onto Flippa and buy a magic website within a few minutes. You’ve got to remember what Tony Robbins is teaching here -anything in life, things take effort.
There is an amount of stuff that you have to do. You will have to kiss a few toads as they say. I know it’s a crude term, but you’re going to have to turn over and look at a few websites. There’s always deals out there. You cannot tell me you can’t find a deal on Flippa. We do it all the time, live, totally unscripted. Literally, we do it front of live audiences of hundreds of people.
We have our Digital Students tell us all the time the incredible deals they’re finding when buying websites on Flippa
Liz: Actually, we did it on our Digital Investors Q&A webinar the other day.
Matt: Yes, and literally that same day, I’d done coaching calls with two of our high-level coaching clients. One of them said, “Matt, I just bought this awesome site on the Flippa platform. No one else bid on it. It was $300.” And I showed it to our community and every single person said, “Wow, that domain name alone is worth $300.” The amount of content that was on there was worth thousands.
And then another client of ours bought a website for $1,200. And out of all the hundreds of people that were live on that webinar that night – when I asked them, none of them had even seen or bid on that website. The domain name alone was worth the money. It also had around 40 articles on it. We were looking at it live on the webinar, and everyone’s just like, “I’ll give you $2,000 for that website now.”
There are always deals there, and you’ve got to remember that Flippa has thousands of listings every single day. You can jump on there now, you will see thousands of websites for sale. You can’t tell me you can’t find a good deal through any of those.
Getting into Deal Flow when Buying Websites on Flippa
Matt: So it comes to another concept to where we talk about getting into the deal flow.
I know we’re sitting here and saying, “Don’t give up,” but we also know as a beginner just how hard it is. It gets overwhelming, and you don’t really know a lot. But, what we find is you don’t have to be that experienced when buying websites on Flippa.
It’s when you start having a go at it, like what Tony Robbins said, take massive action. Look at tons of sites, not just one or two. If you tell me, “Matt, I looked at 500 deals or I looked at 100 deals this month.” Then I’ll start listening to you and say, “Okay, either your search pattern’s wrong, or you’re not in the deal flow.”
It’s interesting, certain people have other stuff going on in their lives and they get blinkered. But when we go on these big binges of buying websites, we get in the deal flow. We’re just immersed in it. And that’s when the good deal start to pop-up. It’s like that concept of flow. We call it the deal flow, when we’re looking at buying businesses or buying online businesses.
Practicing your Due Diligence Checklist is a great way to get into Deal Flow
Liz: This all comes down to reps, reps, reps. Because the more often you do it, the more you learn. You say, “Okay, I’ve seen that kind of website before. No, didn’t like that. It’s not one I want.”
With all these reps, you will actually get better at mistake number one, which is you get a better search image. You refine exactly what you’re looking for. You get some systems in place and you internalize a lot of the questions.
And like I was saying earlier with due diligence – when you initially start doing your due diligence, it takes a long time. But as you go over and over it a few times, you start to get a feel and you can actually start looking at a site and go, “Okay. I feel like that’s a good one. Or I feel like that’s not.” And so it gets easier and easier over time. So I think that’s the main thing.
It doesn’t Pay to be a Perfectionist when Buying Websites on Flippa!
Matt: Let me point out one more little concept that this brings up too, which is, it’s very common in our community, because we have a lot of high-performing individuals. Liz is going to laugh here.
Liz: Perfectionists!
Matt: In particular, we seem to attract a lot of high-performing women in our community. And I’m married to one right here! Perfectionism. And it is cute that I do these coaching calls because we see a lot of you as well being too perfectionist.
A lot of you think that everything’s got to be perfect to find the right deal. Guys, you’re not going to get that. The nature of the beast is that we’re buying and renovating starter sites.
We’re buying websites that have problems because we want to renovate them and fix them up. No website is perfect. So it’s a fun game and it is definitely a whole other topic for discussion.
We spend a lot of time coaching people through perfectionism, because perfectionism can hold you back in life. And we’re experts at it. We’re all perfectionists. Well, one of us is, more so than the other!
So, this is just an interesting concept and a fun one that we bring up with our students. You might just want to check yourself there. If you’re thinking you’re not finding deals, I’m guessing you’re a high performer, and you’re probably being too perfectionist on your first website deals. Have fun with that though!
Ready to Learn More About Buying Websites on Flippa?
Liz: It is about getting in the flow, getting in the deal. So there’s hopefully some advice that will help you get on the Flippa platform, get into this world of buying and renovating and potentially selling, or just keeping, building a portfolio of cashflow positive websites.
I hope you enjoyed these tips. If you want to see more about the stories that we’ve been mentioning, check out the success stories on the Matt and Liz Raad YouTube channel. We’ve got heaps of other great information for you here. And if you want to see more, make sure you subscribe.
Be sure to watch our masterclass on how to buy websites for passive income to learn our 3-step portfolio strategy.
