In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Matt Raad, a professional speaker, eBusiness expert, and acquisitions advisor with a unique skill set. He has spoken at various eBusiness events and conferences worldwide, focusing on topics such as business investing, mergers and acquisitions, website investing, and SEO. Additionally, he provides guidance on business growth, online strategy, and life balance.
Today, Marc and Matt discuss the process of buying, selling and renovating online “real estate.”
In this episode, you will learn:
- The power of digital assets in generating cash flow and building wealth.
- How websites are valuable digital assets that can be acquired, improved, and monetized just like physical properties.
- How to get started in this space, including tips for due diligence.
- Trends in the industry, including how AI can assist those who buy and renovate websites.
- And more!
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Matt has used a very unconventional method to create financial freedom in his lifetime, starting with nothing and building a high cash flow portfolio through buying and selling businesses.
He and his wife Liz are website investors, which means they use digital assets to generate cash flow and build wealth. They were one of the first in the world to buy, build anf renovate websites, a strategy they now teach beginners to reach 6- and 7-figure incomes.
Matt is joining us today to share his insights into his journey as a successful entrepreneur and investor.
Matt, welcome to the show.
Thanks so much for having me, Marc. It’s great to be here.
I’m looking forward to today’s topic because it’s definitely unique. I hear about people investing in all different kinds of things, but investing in websites is very different. How did you discover this as a viable investment option?
How the Raad’s Discovered Their Website Investing Strategy
It goes back to my childhood. I grew up in rural Australia, and we never had much money. One of my driving goals back then was to find a way to generate passive income. It’s always been my dream, and I was always fascinated by business.
Liz and I met at uni, and when we finished school, we bought our first business. We were just hooked from day one – we loved business. Of course, we made all the classic mistakes. We did due diligence incorrectly… All that sort of stuff. What that meant was we went on this journey of trying to figure out the perfect business, one in which we don’t have to be working in 9-5.
We were buying manufacturing and wholesaling port businesses, and in time, selling them. We got really good at it. Fast forward to 2008, during the Great Recession, we were starting a family. Around that time, we’d started to look into this thing called the internet. Even back then, online businesses were a thing. Liz had this idea that we do what we’ve always done with brick-and-mortar businesses, but instead do it with internet businesses. It was a great idea, because it meant that we don’t have to buy physical inventory.
So we started by replicating our strategy of buying and selling brick-and-mortar businesses, but we shifted over to online businesses. It worked phenomenally well.
How It Works
What sort of websites do you buy? How do they work?
Most people immediately think we’re buying and selling e-commerce websites, where physical inventory is involved. It was nothing like that whatsoever. We liken it to billboards. This form of advertising involves purchasing space on a billboard in order to promote your company, its goods and services, or a special campaign. Billboards are usually placed in high-traffic locations to draw the most attention from vehicles and passersby.
Well, that’s exactly what we do with websites, except it’s all virtual.
We buy what’s called a content site. These websites are focused around a single topic. For example, it might be how to become wealthy. Instead of offering a service, all we do is create really good content. People come to the website, see an ad – which is your online billboard – and when they click on it, we get paid off Google or the advertiser. It’s quite easy and it’s all automated.
Our job is to create that traffic and place the billboard in the right place.
So, we buy websites that have lots of traffic – monthly visitors who come to the website to read the content – and it’s worked phenomenally well. We can go into really weird and wonderful passion niches like gardening, how to play golf, how to play guitar… All of the beginner type stuff, where people are desperately looking for answers. If we can provide those answers for them, and good content, hopefully they will click on an ad and we make money.
On the fulfillment side, it’s totally automated. There is nothing else we have to do. In essence, that’s how it works, and that’s why we love them.
When you’re buying one of these websites or these companies, do you have to ensure that once you take it over, are you creating the content or are you partnering with the person that was there previously? How do you keep the content flow going?
How to Run the Websites
When you take over the website, you take over the content production. To some, that may sound scary. I wasn’t a particularly good writer, I actually failed at English. But what we quickly learned online, and I’m sure you’ve heard of this, we hire virtual staff everywhere. That’s the other thing, beauty for us. We don’t need physical staff here in Australia or anything like that. All our staff are scattered all around the world, so we just hire writers and it’s really, really easy these days. We go to websites like Upwork or Fiverr.
We find expert writers, who are sometimes journalists, and hire them at a really good rate to write on a per article basis. That’s what keeps the content going on the website. So that’s one of the skill sets that you do need to learn how to do – not how to write, but how to outsource and keep the momentum going of the website. That’s how we renovate them, as well.
What our real secret sauce is, is that I mentioned at the beginning based on our very first big mistake that we made in business all those years ago was due diligence. Okay, we did not get that right. We didn’t know what we’re doing. We’d never been in business before. And so we’re really passionate about it these days. This is how we’ve made so much money online: We’ve gotten really good at due diligence. So that’s the main other skill is so what you said, keeping that content going, but first and foremost is getting good due diligence to understand the good websites to buy.
How to Do Due Diligence on a Website
How does it work in terms of due diligence? Is there a marketplace for websites?
Yes, it’s just like traditional bricks and mortar businesses. There’s heaps of brokers out there. Websites are recognized as real businesses.
Is there a monthly minimum traffic that a site would need to even be considered purchasable?
Yes and no. If you’re just starting out, you can buy a small website – say under $5,000 – to learn how to do it. That way, there’s not much risk. That type of website is going to be far from perfect. It probably won’t have much traffic once you get going with this. Really what it comes down to, there’s two metrics that we look at. It’s profit and traffic. It’s not just the traffic, but it’s also the profit, not sales, the actual profit that we want to look at. And we buy sites based on a multiplier. So really those two factors are very closely aligned. They influence each other a lot. So in terms of is there a minimum traffic amount, the answer depends on your budget, what you’re looking to invest, and what we suggest to people is start out small on a little tiny site and then build up your skill set, buy a couple of websites, learn how it all works, proof of concept type idea, and then you might go to a $10,000 website or a $50,000 website and then depends on your budget, you might go to six figure websites.
So in terms of is there minimum traffic, not really, it’s more just what is your budget or what’s your investible bank, what are you prepared to, because these are alternative investments, like any investment, there’s a risk. And so it more comes down to your risk profile, but also your knowledge profile as well. You wouldn’t run out there and buy a six figure website without learning a few things first.
After you buy the website, what’s the time requirement? I’m sure initially there’s a lot, but what does it take to get this thing running on its own? Can this scale over time?
How to Scale
Absolutely. That’s one of the big attractions.
Most of our team is outsourced – we don’t work on our websites 9-5, nor do most of our clients. We liken it to real estate. We buy, renovate and sell or buy, renovate, hold for the cash flow. What we do is we build up a team to help us renovate these websites. And typically that team would just be, I can give an example, we have a stay-at-Home Mom, Lisa, she bought a website for $2,000 and to give an idea that this was an affiliate site, so she made money off the Amazon affiliate program and it’s based in America, and she basically just has two writers working on that website with her plus an editor and in plus her, and she does the keyword research now.
She’s been working on that for quite a few years, and over the time, in about three years, it went to $5,000 a month profit, then it went to $15,000 a month and she’s had $30,000 a month. That website now is worth a million dollars based on $30,000 a month. But in terms of running that site, it’s no different now than what it was two years ago or a year ago. These are very leveraged because it’s just a consistency of tidying up articles, putting on some new content, and that’s outsourced. And now what she’s doing is she’s got a couple of other sites she works on as well, so you don’t have to work on these nine till five. And what we actually teach is we build a lot of people like us who do this and including a lot of our clients, the goal is to build up a portfolio of websites just like a portfolio of shares and a portfolio of real estate.
And so there comes a point where it gets too much to manage and you are doing it full time, but you can easily handle one to three websites, part-time whilst you’re either running your own business or you’re working a corporate role. We have a lot of clients who are in full on corporate roles just like your client’s Mark. And this is the perfect side hustle to build up. I guess this is one step above real estate in terms of what you’ve got to do, and the main job that owners do is what’s called keyword research. Other than that, it’s quite passive.
Are most of the sites that you’re buying from the original content creator, or do websites go through iterations where you’re buying them from other people like you?
It’s both. There are a lot of people doing this now, compared to when we started. What happens is yes, they build up sites and as they’re building their portfolio, so we’ve got stories on our website you can see them where professional flippers will start with a $20,000 website and Lisa work up and they flip up, and so they’ll build it up and they might sell it for a couple of hundred thousand dollars and then they roll that into another deal and then they keep building up their bank that way. And that’s called website flipping. And that can be very successful. And typically those people, yes, they’re building them up and they sell them off. So when you go onto Flipper, for example, to buy a website, you’ll see professionals who sell multiple websites that have been fixed up. Those assets can be really valuable. They’re legitimately built websites.
How to Monetize Websites
How does the income aspect work? How do you monetize the websites?
What’s great about being on the internet is everything’s tracked – every single click, no matter the website. So, there are lots of affiliate programs out there.
The easiest and best affiliate program for beginners is the Amazon Affiliate Program. It’s free to sign up for, and basically if you send traffic over to Amazon, that person’s cookies track for 24 hours. So if they buy anything at all on Amazon – the world’s best selling machine – the affiliate gets a percentage of the sale.
It’s the same with the Google Ads program. You can sign up to Google Ads program for free, as long as you have a website with a couple of thousand visitors per month. Once you sign up, it’s literally just like Amazon – they give you a tracking code that you can copy and paste into the website on the pages where you’re talking about products, or pages with ads.
There are lots of other affiliate programs that you can work with. You can also lease out website space, or purchase website space, through banner ads. That’s becoming a lot more popular as well.
That’s three ways that we monetize websites.
Trends in the Industry
What are some trends you see in the industry?
The main trend is using AI as a tool to speed things up.
One of the things that AI has dramatically improved for us, particularly if you’re a beginner, is it’s helped us actually overcome the two big barriers, which is the initial writing of articles. You can use AI to draft up an article, so your thoughts. So if you’re someone like me that doesn’t normally write, but I’ve got an expert writer on my team, I can use AI to draft up an outline of an article very quickly in what, 30 seconds or a couple of, well, realistically, let’s say five minutes. And then I can send that to my writer and say, I want something like that. I want you to create, but humanize it and do your own research and verify everything within that article.
So that’s really exciting. And the other trend that it’s really helpful for us with ai, and this is the biggest winner for us, is AI does help us do what’s called keyword research, like researching these niches so we can easily go into niches that we know nothing about, don’t have to be an expert at all. We’ve always been able to do that, but now I’m a lot more confident. It’s a lot easier to do the keyword research there. So I think AI is a big game changer for us. It’s a very powerful tool for those of us that use it correctly. And I think the dust has still got to settle around ai, but I think it’s going to open up a lot of opportunities as well. And then, yeah, I think the biggest trend that I’m seeing is in this day and age, and I think your listeners, anyone that’s an investor will understand this.
This is an investment class that you need to be paying attention to. Now. I’m not giving financial advice, I’m just answering your question about what are the trends I think you can’t ignore. Now, this is a very powerful alternative investment. Traditionally, people around the world were having to generate wealth to give them that leverage from time, if they’ve used real estate, it’s really, really big here in Australia, and I know it’s big in America. Liz and I always bought and sold businesses, but we’ve done a bit of real estate as well. So you’ve got these asset classes of either buying and selling businesses to get leverage real estate or shares and bonds, and now a bit of crypto as well. The big trend that I’m seeing now is there’s a lot of very smart people suddenly t tweaking onto what we all do, which is also in website investments because we’ve got this big problem coming up, a potential recession, high inflation, even deflation websites, when you think about it, there’s such high profit margins.
It doesn’t matter if it’s inflation, deflation, they’re just cash cow machines and their assets. What’s more important though, it’s not like the old days where websites were kind of a bit ephemeral. They’re virtual now, they’re real assets. We’ve got websites selling for millions of dollars. We’ve got clients that are selling websites for millions and millions of dollars creating, this is like the new online real estate. So I think that’s the biggest thing. Now, it’s not a walk in the park, it’s not a get rich quick thing or anything like that. These are real businesses, but I think that’s the biggest trend that we’ve seen coming. We’re now seeing the big players seriously looking at this asset class and investing serious sums of money.
Well, that sums up all of the questions I have for you today, Matt. Thanks for joining me for an episode of The Agent of Wealth Podcast and sharing your unique expertise. Where should my listeners go to learn more about what you do, or get in contact with you?
Your listeners can Google my name, Matt Raad. Or, they can go to our official website ebusinessinstitute.com.au.
Great, we will link to that in the show notes. Thanks again, Matt. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.