End Game: Passive Income or Flip?

[Devil Anse]

So I'm finally somewhat successful at all of this. I work with easier and smaller sites which ramp up to their full potential rather fast compared to a big authority, and I make them in batches of three's so I have plenty aging.

Here's the dilemma I face and I'd like your input:

Should I keep them for passive income or should I cash out and flip?

Here's the thing. Like many of us I suspect, I got into this because I liked the idea of passive income. I wanted to have a ton of sites and spend maybe an hour per week working with each one and just keep making money. I don't feel like this is as easy as it once was now that Google's SERP pages aren't nearly as static as they were.

The problem with the passive income idea is that even if you don't get nailed by some filter or algorithm change, you're going to constantly have to push them back to #1, #3 or whatever. Algo's come and things change ever so slightly. I'd think that after enough runs of this that your site would become very strong and solidify itself, but who has time to wait for this.

The passive income is never truly passive.

But if you have say 100 sites all pulling down $10 a day (I don't ) and they all fluctuate between $5 and $10 a day... that's still not bad at all. And you'll have cashflow to outsource the "re-push" back up to $10.

But even if you've spread your eggs around in many baskets like this, what if Google manages to change something and wipe them ALL out?

That's where the ethical dilemma of cashing out with a Flip comes in. Should we really be selling things we aren't sure are stable? Is that fair to the buyer or is it their job to take the risk and check things out? I guess if you're open about how it ranked well and what all you did, it's fine.

But you might get 10-30 months income off of them. A site making $300 a month could go for $3000 - $9000 for a one time payout, plus whatever you made during the ramp up. That's not bad, but what if the site would have stayed for longer than 30 months and ended up growing even more?

Another thing I'll do is have some for the sole purpose of keeping and some for the sole purpose of flipping. That helps me satisfy the urge of keeping some. The ones I keep are the ones I will convert into broader authorities. Is this dumb? Should we always be liquidating and reinvesting into bigger flips?

These are my thoughts on the issue. Does anyone have any other viewpoints or suggestions or guidance about it? I'd love to have a discussion to help me settle it.

 

[mrmoneybags]

Money doesn't have feelings. Attachment is suffering and lost opportunity. It'll keep you from taking risks or even taking obvious rewards. When you've built up a site that far, you've been floating in a sea of risk that's been trying to drag you to the bottom. The flip is your chance to grab a life raft, be pulled up onto some ocean liner, eat a fine cuisine meal, and start building your next site from your new bunk on the boat. Not from floating around hanging on for dear life to some piece of wood.

 

[Vernon2014]

Money doesn't have feelings. Attachment is suffering and lost opportunity. It'll keep you from taking risks or even taking obvious rewards. When you've built up a site that far, you've been floating in a sea of risk that's been trying to drag you to the bottom. The flip is your chance to grab a life raft, be pulled up onto some ocean liner, eat a fine cuisine meal, and start building your next site from your new bunk on the boat. Not from floating around hanging on for dear life to some piece of wood.

I think a lot of it also depends on what type of projects you're working on. I've seen people flip low-risk stuff waaaay too soon, only to see the new owners take the projects to the moon. You dangle a little money infront of someone's face and they'll bite, even if continuing to work and build is the right move. There's not really a right or wrong that applies to everything, it needs to be on a case to case basis because yeah you're taking on more risk the longer you hold, maybe, but you're getting more reward too.

 

[Ryuzaki]

There's no clear cut answer here, which is what makes it such a huge dilemma for people who are able to successfully build sites and get them earning relatively consistently and quickly.

I like to think about it in terms of "earning velocity." Once your growth percentages get smaller and smaller or perhaps flatline or go negative, and you aren't able to scale up operations hard enough to return it back to huge returns, that's a good and honest time to sell. The buyer and seller both win in these arrangements and everyone sleeps well at night.

 

[Tiddlywinx]

There's no clear cut answer here, which is what makes it such a huge dilemma for people who are able to successfully build sites and get them earning relatively consistently and quickly.

I like to think about it in terms of "earning velocity." Once your growth percentages get smaller and smaller or perhaps flatline or go negative, and you aren't able to scale up operations hard enough to return it back to huge returns, that's a good and honest time to sell. The buyer and seller both win in these arrangements and everyone sleeps well at night.

^ This.

 

[SteelBlue]

Well, do any of you actually have any flips notched off on your belt?

I've sold about five sites for anywhere from $100-500. Some were based on very small amounts of earnings and others went based on the content and page rank. I've not really encountered this dilemma you guys are talking about yet. But my reason for flipping was just to get rid of stuff I had sitting around.

 

[Napolean]

Well, do any of you actually have any flips notched off on your belt?

I've sold about five sites for anywhere from $100-500. Some were based on very small amounts of earnings and others went based on the content and page rank. I've not really encountered this dilemma you guys are talking about yet. But my reason for flipping was just to get rid of stuff I had sitting around.

Well, how much time did you have to put into those sites to get that $100? $500? Once they're off the ground, things tend to grow exponentially... at least up to a certain point... so that $500 site could have been $1000 the next month, or $5,000 a couple months later. That's the dilemma, if you haven't experienced it it's probably because we're talking about sites worth relatively low amounts here.

Take your highest earning site... if you could sell it for 25x what it made last month in earnings, would you consider it? How much of your traffic comes from a platform that could, in one way or another, essentially disappear overnight? (Most traffic, if you're pessimistic enough, could disappear overnight for one reason or another...) So you start to add in the risk of holding onto it and the instant money you could get AND eliminate that risk... that's where the dilemma comes from.