4 ms·

Example given in the article: > So, after 1-year Sam has purchased $1,000 in monthly future cash flow (website + vending machine + beach house). It cost him $3

by takoid 5y ago

Example given in the article: > So, after 1-year Sam has purchased $1,000 in monthly future cash flow (website + vending machine + beach house). It cost him $33,000. He puts in two hours max per week on these purchases. > Calculating a rate of return yields ($1,000 x 12 months= $12,000 per year) and $12,000/$33,000= 36%.

gruez 5y ago
The problem is we have no idea how realistic those numbers are. Are there $3000 websites for sale that net you $200/month? How easy are they to come by? How much work/skill do you need to do to find them and perform due diligence? What's the risk of buying a website that turns out to be a dud? How long does the website last before drying up? All of these questions can be easily and verifiably answered for the s&p 500, but not for a random website. edit: a few commenters pointed out that these passive income business (for lack of a better phrase) aren't as good as they sound. https://news.ycombinator.com/item?id=27100881 https://news.ycombinator.com/item?id=27100881 https://news.ycombinator.com/item?id=27100633 https://news.ycombinator.com/item?id=27100633
- dehrmann 5y ago
  > Are there $3000 websites for sale that net you $200/month? Almost absolutely not. That sort of pricing implies it'll net you $20/month in a year. Even if it's not that bad, you'll have to put in work to keep it printing money.
  - csa 5y ago
    > Almost absolutely not. That sort of pricing implies it'll net you $20/month in a year. What’s your math on that? The $3k for $200 a month of seller discretionary income (sdi) is definitely ambitious and rare - basically, it’s either something a friend wanted to unload or something that had some low hanging fruit for instant profit increase. A more standard multiple would use a 3.5 multiplier of annual sdi for an approximate price. This would mean $3k gets you ~$70 a month or $200 a month will cost you ~$8400.
fredophile 5y ago
The problem with this is that the examples are unrealistic. If someone knows where I can buy a website making $2400 a year for $3000 please let me know. The majority of the income in year 1 is coming from the rental property. A down payment for property will typically be between 5-20%. That puts the condo at between $125k-500k. I'd guess we're looking somewhere in the higher side if this is supposed to be on a beach where people are taking vacations. Condos have higher interest rates than houses. Rental properties have higher interest rates than your home. If we assume a $300k mortgage that makes mortgage payments around $1400-1500 a month for a 30 year mortgage with a fairly low interest rate. On top of that they have to pay HOA fees, mortgage insurance, home insurance, property taxes, and utilities. Let's be generous and say this brings us to $2000 a month total. A quick search tells me that property management for an AirBnB seems to start around 15% or more. Assuming they only pay 15% this means they need to bring in at least $3000 a month to have any chance of making the $550 profit. That might be doable but it means averaging $100 a night, every night year round. When it isn't tourist season they're going to need to have lower rates. There will be nights when no one wants to rent it regardless of the rates. This might be doable in some locations but it doesn't seem like something you can do everywhere.
- mattm 5y ago
  > If someone knows where I can buy a website making $2400 a year for $3000 please let me know I've seen websites like this advertised on flippa or what not. The problem is that they usually rely on "tricks" and there's a good chance that Google will knock the site down in their search rankings when the algorithm changes next time. The risk is that it will keep it's traffic long enough to break even on the investment. Any legitimate website making $2400 per year with a high chance of continuing with minimal maintenance is going to command a larger multiplier.
Tabular-Iceberg 5y ago
No REIT I've seen has comes close to this. I can't know for sure, but it makes me suspect that either every single REIT in the industry has a crippling embezzlement problem, or this guy is pulling numbers out of thin air. There's of course the DIY aspect, but I doubt two hours per week of effort as a amateur handyman is enough to make that kind of difference. If it was, I'm sure I could quit my job as a developer and start mowing people's lawns and cleaning their gutters and make far more money.

by takoid 5y ago

gruez 5y ago

The problem is we have no idea how realistic those numbers are. Are there $3000 websites for sale that net you $200/month? How easy are they to come by? How much work/skill do you need to do to find them and perform due diligence? What's the risk of buying a website that turns out to be a dud? How long does the website last before drying up? All of these questions can be easily and verifiably answered for the s&p 500, but not for a random website. edit: a few commenters pointed out that these passive income business (for lack of a better phrase) aren't as good as they sound. https://news.ycombinator.com/item?id=27100881 https://news.ycombinator.com/item?id=27100881 https://news.ycombinator.com/item?id=27100633 https://news.ycombinator.com/item?id=27100633

dehrmann 5y ago
> Are there $3000 websites for sale that net you $200/month? Almost absolutely not. That sort of pricing implies it'll net you $20/month in a year. Even if it's not that bad, you'll have to put in work to keep it printing money.
- csa 5y ago
  > Almost absolutely not. That sort of pricing implies it'll net you $20/month in a year. What’s your math on that? The $3k for $200 a month of seller discretionary income (sdi) is definitely ambitious and rare - basically, it’s either something a friend wanted to unload or something that had some low hanging fruit for instant profit increase. A more standard multiple would use a 3.5 multiplier of annual sdi for an approximate price. This would mean $3k gets you ~$70 a month or $200 a month will cost you ~$8400.

fredophile 5y ago

The problem with this is that the examples are unrealistic. If someone knows where I can buy a website making $2400 a year for $3000 please let me know. The majority of the income in year 1 is coming from the rental property. A down payment for property will typically be between 5-20%. That puts the condo at between $125k-500k. I'd guess we're looking somewhere in the higher side if this is supposed to be on a beach where people are taking vacations. Condos have higher interest rates than houses. Rental properties have higher interest rates than your home. If we assume a $300k mortgage that makes mortgage payments around $1400-1500 a month for a 30 year mortgage with a fairly low interest rate. On top of that they have to pay HOA fees, mortgage insurance, home insurance, property taxes, and utilities. Let's be generous and say this brings us to $2000 a month total. A quick search tells me that property management for an AirBnB seems to start around 15% or more. Assuming they only pay 15% this means they need to bring in at least $3000 a month to have any chance of making the $550 profit. That might be doable but it means averaging $100 a night, every night year round. When it isn't tourist season they're going to need to have lower rates. There will be nights when no one wants to rent it regardless of the rates. This might be doable in some locations but it doesn't seem like something you can do everywhere.

mattm 5y ago
> If someone knows where I can buy a website making $2400 a year for $3000 please let me know I've seen websites like this advertised on flippa or what not. The problem is that they usually rely on "tricks" and there's a good chance that Google will knock the site down in their search rankings when the algorithm changes next time. The risk is that it will keep it's traffic long enough to break even on the investment. Any legitimate website making $2400 per year with a high chance of continuing with minimal maintenance is going to command a larger multiplier.

Tabular-Iceberg 5y ago

No REIT I've seen has comes close to this. I can't know for sure, but it makes me suspect that either every single REIT in the industry has a crippling embezzlement problem, or this guy is pulling numbers out of thin air. There's of course the DIY aspect, but I doubt two hours per week of effort as a amateur handyman is enough to make that kind of difference. If it was, I'm sure I could quit my job as a developer and start mowing people's lawns and cleaning their gutters and make far more money.