How To Become A Digital Asset Investor And Buy Online Property
Entrepreneurs, investors and digital asset experts Matt and Liz Raad not only fell in love with each but fell in love with the digital market that has now become their business. Originally both studying zoology, their interest soon expanded to buying assets, renovating and selling websites where they would double, sometimes even triple in profit.
In this episode of Property Investory you will be able to hear how this passion of theirs came about as well as the initial stages of their success story. You will be able to learn how exactly they managed to generate so much profit just relying on their websites!
-Matt and Liz Raad
Matt and Liz Raad have been buying and selling websites, creating a unique source of income for themselves for the past ten years.
What we spend most of our time on these days is buying and selling websites, we’re online entrepreneurs, but we also do a whole range of investing, but particularly for the last 10 years we’ve bought and sold websites, online businesses and virtual real estate.
Yeah, we, we look at it as virtual real estate.
The talented couple delve into a typical day in their lives revolving around their online business, to maintain and continue their success.
Well, first of all we’re looking for deals of course. So our skill and our talent is valuing things, valuing business in online business. So we’re looking through the marketplace all the time to find businesses that are ideally undervalued. That’s what we’re always looking for. We very much use that property strategy of buying good buy, renovate, and then hold cashflow or sell at a higher price. So we’re looking for deals.
I guess our day to day main activities are the renovating side of our websites, if we’re working on them with our teams. So basically, what that involves is upgrading or getting new content onto the website in a very simplistic essence. That’s basically what we’re trying to do when we’re renovating these websites.
We’re Improving them and getting more content onto them.
The couple go on to explain how the online business world has significantly changed with time, as websites now are truly valued.
The thing is, what we’ve seen over the last 10 years Tyrone, and it is really interesting is now when we first started, people didn’t really view websites as a true asset. And it’s interesting over this journey, definitely now in the year 2020 they are definitely viewed as a highly valuable asset. And even though we refer to it as virtual real estate, people are starting to realize these things have got the same value literally as a physical property or a physical piece of brick or mortar business and particularly in the current environment. So let’s say for us and all our clients, anyone online and all our friends who are online, whilst it’s challenging times, none of us are feeling the effects of it as much as what you’re seeing people out there with PAYG jobs and stuff like that because we all operate online already.
Before plunging into how Matt and Liz Raad found themselves into the real estate world, the two talk about their upbringing.
Well our story is so together because we’ve been together since we were in our twenties.
It is a very similar story because both of us grew up on farms and I was destined, I guess to be a farmer or something agricultural. But it was interesting back then in 1987 when I finished up school, there was a really bad recession here in Australia and it really hit all us farmers and so I decided no, there’s no money in that and went on my own merry way. And then I guess we met. So I moved into Sydney, I left home as soon as I finished year 12, moved into Sydney and my background, what’s important what drives me, I came from a very poor background. Even though mum and dad were farmers, dad was a farm manager. We didn’t own the farm so we never really had that much money. Things were really tough. I guess in my childhood I remember, well, my family come from working-class backgrounds and you know, rich people looked down on us, that was tough that side. And for me as a kid, what drove me in life and still does to this day was security. I didn’t ever want to go back to that background and struggling for money. And I was looking for ways to become wealthy or, or and have money. And so for me, business was the way.
Well, you did version two to start with, because the way we met was both of us were I from the farm as well. And we both did zoology at uni so our actual qualifications are zoologists, very helpful in the world of digital marketing.
We got excellence in red kangaroos, Tyrone. That was what we did our honors in.
And it was actually interestingly how we met because Matt couldn’t use computers. He would copy my assignment.
Oh lovely. Oh that’s amazing. So when you said that you both were both raised on the farm, was it in New South Wales or in a different state that you both came from originally?
Yeah, I’m from the snowy mountains and Matt is from the Southern Highlands.
What’s the difference between the two in terms of the farming and what kind of agriculture did you learn from there or raise up from there?
In my area, there was a lot of orchard. I was near Batlow the little town that actually terribly burnt and it’s really, really sad. But lots of orcharding and some propping, but a lot of sheep and cattle.
And for me, I grew up on the world’s largest chicken farm and 400 Hereford cattle as well. So that’s my background.
That’s so fascinating.
Doing zoology, studying red kangaroos to then business.
So that was the thing, in the end, I think it was more Matt rather than me actually. But he was so driven to do something and we wanted to earn money from being back out in the country. And for most people who graduated from zoology, you need to work. You don’t actually work in a zoo. Generally, you do research and you do things, but usually based in a city, or at a university. And that’s not how we wanted it to be. We always had to scrounge for money because you had to get grants and it was always a struggle. And so both of us wanted to do something different so we decided, I don’t know what took it upon us, but we found this little business and we bought it and learnt from there.
Looking back on their journey, the couple explain why zoology interested them in the first place.
For me, that was pretty easy. I wanted to get into the rural side, either a farmer or become a vet, that was always a classic one back in my days. I just didn’t get the marks in school in my HSC and my mum luckily said to me..when I first left school, I actually did a trade-in Sydney on the dockyards in electronics. And what happened there was I wasn’t happy because it was, it wasn’t nine to five. But they paid for me to go to TAFE and study and I was working on the ships and stuff like that and all looked exciting, but it didn’t really interest me. It wasn’t my thing. And so I accepted a redundancy payment. I basically had the option to take a redundancy payment and my mum gave me some really good advice. She said, ‘Look, follow your heart. You’re young, you’re not attached to anything. You’ve always wanted to go to uni and you want to figure out how to make money. You don’t know how to do this yet. So just follow your heart and go to uni’. And that’s what I did.
And I didn’t get the marks to do anything other than science. And I always had a big interest in zoology. So as a kid growing up on the farm, literally every weekend and every afternoon I was out in the bush looking at animals and trees and things like that. I just absolutely loved it. So I just followed my heart and it worked. Got to meet Liz. It was awesome.
I love that story. And Liz, what about yourself?
I think I’m the same. I was always fascinated in nature. I loved being outside, I live my life outside. I’m fascinated about how things work and I think that captured me. I just wanted to figure things out and find out more about the world.
After meeting each other, falling in love, and studying zoology, Matt and Liz Raad continued their journey together through business.
We bought a little business.
Basically it was a manufacturing business and you’ll find this really interesting. It sounds bizarre, but we followed these bizarre paths in life, realizing now, but we made brush cutter heads. So you know with the snippers when people cut their lawns with the snippers, you know the little plastic heads that go on the end?
Oh yes, yes.
We made those back in the day when Australia still had a manufacturing industry and we didn’t realize it but that business was about to go bust and our accountant at the time said ‘this is an okay business’. No one could tell us how to value a business. So we had no idea what we’re doing and we bought this with borrowed money and all that sort of stuff and we pretty soon after getting into it, we had no idea, were totally self taught on business.
We had to start reading business books and sales books because we pretty quickly realized we’re going to go bankrupt here. And it was a small business and we just got in though. And luckily we read some of the right books, all about sales and where we realized we can turn this thing around real quick if we can just sell heaps cause we knew nothing else about business. So we just had to learn all the classics like Tommy Hopkins, Zig Ziglar, Brian Tracy, and luckily we were able to hold it together and then we built it up. It was hard as it’s a manufacturing business and it was unique too, we used to outsource all to the manufacturer, we didn’t own all the tooling and everything like that. We just outsourced all that to factories in the Western suburbs of Sydney. And we’d put these heads together and we sent them all off around Australia. And then around the world we’d got into exporting, we became very successful with it and we started supplying big name manufacturers like Honda, Steel and Makita and stuff like that with brush cutter heads.
Wow. Now that’s a fascinating story. And since then, how long did it take you to get to that level of success?
We were doing other businesses as well because that one, it was quite leveraged. It was very seasonal. So once we got it going, and that’s the other thing we are good at, systemizing, trying stuff, figuring it out and working out what processes work well. And so we only had to really work in that business about six months in a year. And so that’s why we were able to start working on other businesses and we started buying all the businesses and renovating them and selling them. And that’s what kind of got us into that process of okay, we can buy an asset, add value, and then sell it for more than we bought it for. And so that’s what we did. So that was 10 to 15 years.
It was almost exactly 10 years when we sold it. So it looks like an overnight success. It wasn’t, it was 10 years. And the other thing that is important leading to our story, we learned running manufacturing businesses is really tricky and same as wholesale import businesses, which is what we also did, because you’re always constantly reinvesting every last cent you have into this thing called stock. So you have all your widgets, whatever it is, your product that you physically sell. You have to store it somewhere, you have to stick it. That’s your cash bank and it becomes very difficult to manage it. It’s harder than a service business or other businesses out there. It’s also very lucrative if you get it right. Don’t get me wrong, but I think that massively influenced Liz and I in our journey and why we just hooked on to being online. Like ducks to water. It’s so different. Being online to this day we do not touch businesses that involve physical stock because I feel it held us back because we’ve never had spare cash flow because every last cent would have to go back into the business. Whereas now it’s completely different. We’re selling just electrons. There’s no stock. The cashflow is ours.
Before being the online experts that they are today, Matt and Liz Raad share how they bought their first property.
Oh, that was our own house. So I laugh now gosh because people, first home buyers think what, 500 or $700,000 and our first house was $135,000. We were quite early in our business career as well so we never had much cash flow.
So basically the bank…I won’t say I lied to the bank manager to get the loan, but he told me how it works. He said, ‘Matt, you have to show me how much money you want’. I said, well I don’t own anything. And he said, can you get a letter from your accountant? I said ‘sure’. And that’s how I did it.
And then because I was the director of the company, which had nothing, all the money was tied up in stock and stuff. I just wrote a, I did a PG, a personal guarantee, and also wrote a letter that said to whom it may concern, I state and claim that next year in this financial year I will earn X amount of money. Because I asked the bank manager, what number does that need to be? And he just said, ‘write that down’. And I just signed it. I just took a massive risk and it worked. We won’t say what bank that was with and back in those days, lending was a little bit different. Certainly wouldn’t get away with that these days, but that’s the truth of how we started with property and Liz was luckily really good at property and very passionate about it.
That’s awesome. Let’s paint the timeline. When was that roughly? Do you remember which year?
That was when we got married? 1998.
We were 23 or something.
When we bought our first property. And then so we did the strategy, where I’m sure a lot of your guests teach this, where we bought our own property, we renovated it, we got it revalued and again spoke to the bank in glowing terms and they let us borrow some money for an investment property and then we bought another flat and renovated that and that worked really well and we’ve got them cash-flow positive. That’s another thing that we should mention that’s really influenced our journey. I just realized that we have always been about cash flow because we couldn’t ever borrow money easily. We needed cash flow. So back in our day when we were hanging around a lot of property investors and were also hanging around a lot of very successful high net worth business people as well. And they’re all telling us you should gear right up and all that sort of thing, but we couldn’t and what they would just constantly do is keep gearing up and buying more and more property or more and more businesses. We hit a limit like maybe some of your listeners are. So we had to find properties that would allow us to be more cash flow positive. So we didn’t get high growth properties as such that were more cash flow positive. So the rent has basically covered the interest payments.
Coming back to the property that you purchased for investment purposes, that unit, was it somewhere that was local around in Sydney or was that a little bit further.
It was in Wollongong. We ended up selling that one.
And doubled our money.
No, I think we tripled on that one. Because remember that was a high growth time. Renovated it really. We did a full renovation, and bought three other properties.
After having success with their properties, the couple share how many they have bought, sold and renovated in the past.
I haven’t actually counted them up. We’ve gotten quite a few because every house that we own, that we live in, we of course buy and renovate while we live there.
-Matt and Liz Raad
Maybe we should give this insight. We always tended to buy, because of Liz and I’s background where we lived, we tended to buy into pretty rough suburbs. S they were cheap houses to get into. But the reason we did that was because we came up with a strategy whereby if you buy a cheap house in a rough suburb, you’re always going to get a tenant. So we couldn’t afford to not have a tenant in our houses. That was the most important thing. And we needed that high cash flow. So we noticed it in these rough suburbs and for ourselves. We lived in a beautiful place called Redfern back then in its day. And so we were happy to live in rough suburbs. And then we moved out into a rough suburb out in the country. But that was kind of our strategy. So our next big investment ones we bought up in Brisbane. Not saying it was rough in that particular, it was pretty rough.
But then with the next house that we bought. It was a sub dividable block. So I bought it specifically so we could renovate that house, subdivided and build another house. We built, moved into the new house, sold the old house and yeah, so we’d always do things like that. And I’m always looking for things that we can add value to.
The intelligent couple have always focused on an add value strategy, to turn the properties over, to reinvest at capital, and to then move on to the next.
Because we’re quite secure, like Matt said at the beginning, we’re very security conscious and quite conservative really. So we’ve always done that kind of strategy and over time I think the consistency of doing that over time means that we built up a lot of wealth. And we haven’t taken huge risks.
As Matt and Liz Raad have jumped across many different things throughout their journey, it is inevitable to have some of the worst property experiences, online and offline.
Well actually offline, with our properties. I was happy with all our properties we bought. None of those were a problem. We’ve not ever had a problem with a resident, like a property investment, touch wood, because we’ve always been so conservative I guess.
We’ve always had cash flow covered.
With online, probably the biggest mistake we made was well when we first got in. And again, we’re very conservative. I mean probably my biggest regret, we didn’t buy more sooner, but we were more conservative. So that’s how it goes. But probably our biggest mistake was we bought, we got cocky, we thought, ‘yeah we can do this’. And we bought an app at one point in our journey. Because we’re used to these websites, they’re pretty hands off. We don’t really do a lot, day to day. There’s not much to be done on these websites.
So we were used to that. And so we bought this app because it makes a lot of money and we thought, cool, awesome opportunity growing really, really fast. But suddenly we had to have a development team, we had to have Apple updates. Instead of going from monthly stuff, we’re going to daily active users and, oh man, that was our biggest mistake. Don’t get cocky and think that, you know it all when it’s, it’s kind of like if we bought a heap of residential properties and then suddenly said, eell, we’re good at this let’s buy a commercial and jump in all guns blazing, that same sort of idea. I think gradually increasing your knowledge and understanding of the marketplace before you jump in and starting small in any marketplace. And that’s what we’ve always done. And I think we should stick to that strategy. I get excited. But yes, we will stick to that strategy.
And, and for us, our personal opinion too is we don’t get involved in businesses we stock anymore.
Despite some obstacles along their journey, the couple delve into their amazing aza moment where everything just clicked.
I think, well for me it was that first $1000 check. When I got that first thousand dollar check in the mail, back then, it was in the mail. I said, ‘Oh yes, this works’, it was from ClickBank. The first website, and that was a really good feeling. It’s like, okay, yes, this does work. This is going to happen. And that was my kind of confirmation to say, right, yes, we’re, we’re hitting in the right direction.
And for me it was a site that led to a few other sites and once we were making $2,000 a month, when we bought it, we renovated it. We basically doubled it to $4,000 a month.
And then we just got it to consistently make us anywhere from five to $6,000 a month. And it was just perfect. It was that feeling of being in the flow. And we really didn’t touch that site very much at all. From there on in, we just added a little bit of content and our team managed it and it was just effortless. And that’s net profit. Every single month we’d make five to six, sometimes $7,000 a month, depending on the time of year. And it’s just an affiliate site. There was no stock. And I’d said to Liz, this is awesome. So we were buying other sites, but those particular sites, for me, the flows were the turning moment, because that happened pretty early in our journey.
Gosh, that’s amazing.
Yes we kept those sites for many years.
Do you still have those sites or have you sold them off?
We sold them off. But I still look at them, they’re still going strong and it was a like a corporate company that bought them. And I look at them and at the time..
Because sometimes you want the cat, it was nice and just opportunistic. We can invest that in something that’s going to grow because they weren’t going to grow anymore. They were just standing there and being nice cash flow.
But we were the leaders in the niche and I was pretty proud of that too. They were the sites where I learned all about SEO and I just knew that they’d be perfect.
Matt and Liz Raad dive deeper into the first few properties they purchased online, and elaborate on how they found them.
That’s a really interesting story because when we first bought those ones, so these days there are marketplaces out there for buying and selling websites. It’s an evolved market and you can go to brokers or website brokers and back then there was nothing like that. So we actually bought that site. Because it’s a big bit of our story that’s missing here, which is listening, I got really good at buying and selling businesses and we became professionals at doing that as business brokers and we’re buying and selling them on behalf of high net worth back in Sydney.
Are you talking about physical bricks and mortar businesses?
Physical bricks and mortar businesses and only manufacturing or wholesale import businesses. Because that’s our specialty, so we got really good at it. And when we saw what was happening online, basically what Liz said to me was, why the hell are we trying to build websites when we can just do what we’ve always done in the past for the last 10 years?
Which is just buy, renovate and fix them up. And so Liz, the legend, just treated it like she does with a real estate or with businesses. She started looking around online. This was back in 2009 looking around. Well, where the hell do you buy a website? No one’s doing this. And this was before any of these marketplaces like flippers, the big one that didn’t even exist back then. So coming back to this awesome website that we bought and fixed up, Liz actually found that on..
Which we do not recommend these days, but we didn’t know where else to start. And then we also had a direct approach to people. That’s how we came up with all that strategy. But that was the history of that site. So we bought that one on eBay, which is the most unlikely place on the planet for a really good website. And the rest worked from there because Liz already knew how to build websites and she’d already earnt her first thousand dollars online. We were really good at renovating that particular site.
How to be a Website Investor and Managed your Digital Asset
Matt and Liz Raad share how they came to a point in their journey, where they wanted to become business brokers for import and export businesses.
We used to bite off a lot of stuff.
Yes, that’s true. But also we were getting to a point I think in our business careers where we wanted to step back from all that management, all that stock, all that stuff. And plus it was around that time too.
I wanted to learn. So I realised very quickly that being a business broker has one incredible advantage. So for me, always being driven about wealth and learning how to be successful in business as an entrepreneur. Because of my background, I didn’t know any entrepreneurs or successful business owners, so I didn’t know any millionaires whatsoever. So when I moved into Sydney, I learnt this idea that you’ve got to get out there and network and talk to people.
But back then I was incredibly shy and so working with business owners, I realised that can open up my world. So I got as a business broker, you get to network and hang out with a lot of buyers and sellers of businesses. And of course in particular what’s really interesting, at first I thought it would be the sellers who are most interesting because they’re obviously successful and these guys in their sixties, they are selling off their businesses. But I realised for every good business that I was representing, there’d be at least a dozen buyers who are all high net worth. So I pretty quickly moved into selling multimillion dollar businesses purely, because I got to learn and hang out with multimillionaires who were interested in buying those businesses. And I got to meet some of my heroes, people that I used to see on the front page of the Financial Review or BRW, which doesn’t exist anymore. These are people that I used to look up and read because back then I was reading everything I possibly could about business and I was getting to read all these stories about these amazing Australian entrepreneurs. And then lo and behold, as a business broker, I got to meet them, go negotiate with them. Sometimes we negotiated against them and mainly I did it for a learning experience. It was pretty intense, but it was just was awesome.
Highly paid as well.
Yes, highly paid, when you sell the big ones.
After meeting all these people, you may have also discovered the driving motivation for buying businesses? They would have obviously had some business prior before buying these new ones. What did you learn from them?
Not necessarily, a lot of the buyers were corporates, very wealthy corporates.
They were CEOs of some pretty famous companies here in Australia and really interesting. But the ones that I gravitated to is exactly what Tyrone said, the guys who are already very successful in business and to this day I’m still good friends with a number of them. You just click with certain people and I just learnt so much and they could see that I was so enthusiastic about this stuff and the thing that drove us bringing it right back to our first, I think this carries through in everything we teach these days, is to our first business we made a big mistake, which was we didn’t know how to value a business. So what Liz and I love doing, when you’d speak to these high net worth guys, these are entrepreneurs, serial entrepreneurs who would buy multiple businesses, every single one of them.
We would sit down with them and I would get them to take them through with me. How are they valuing this manufacturing business or this wholesale import business? And literally we’d sit down normally at McDonald’s before we go into the meeting to visit, because we’re out in the Western suburbs. These are businesses manufacturing businesses in the Western suburbs of Sydney. So I’d pick these guys up just like a real estate agent would, sit down with them and then we would go through and they’d teach me how to value a business, how to understand a P, and L, the balance, and what they were prepared to pay. And then I get to watch them and how they negotiate. And that’s what our life was. And it was awesome, really good.
How long did you do that for?
About five years I suppose. Well then I became an expert and really well known for valuing these businesses and what to do when people are looking at exiting their business. So then I started advising guys who were selling businesses anywhere from a million up to $20 million. And they’d say, well, what do we do? And I had a big network so I could ring up people who had done big deals and ask for advice and stuff like that. But also more importantly, I had the buyers. People who have literally the money. I remember that I knew no millionaires. You got to think of my background growing up, pretty rough background, no money whatsoever. I can remember the first time I met one of these entrepreneurs and he said he really liked me and he was teaching me.
He said, ‘Matthew, right now I’ve got $3 million in cash sitting in the bank and I’ve also got access to more money if I need it through a private network’, because I started working with private equity firms as well, and my jaw nearly hit the ground. I’d never heard someone with that much money sitting in a cash account in the bank. And he said to me ‘that money’s going backwards. I cannot afford to have it sitting there in cash’. I’m looking at him going, ‘man, I could, that would be awesome’. That was the first time I was exposed to this idea, that actually cash when there’s inflation is bad. And to answer the other question, these guys had to continually keep reinvesting and it was a really big learning lesson for me.
The couple look back at how they found themselves in business broking which eventually led them to where they are today in online businesses.
That was more my doing. I somehow managed to find Corey Rudl. I don’t know how I ended up finding that, he was at the internet marketing center and he was a Canadian guy and Rosalind Gardner and they did affiliate marketing way back.
And he wrote an ebook on how to buy cheap second hand cars.
Thinking about how I came across him, I then also heard of Andrew and Daryl Grant and they were doing eBooks. And so that’s how I came across Corey.
As we heard about this Canadian guy that was making money in this place called the internet.
PROPERTY INVESTING STRATEGY
Matt and Liz Raad reveal how exactly they do it, how do they make money simply from online properties?
Well, it is as simple as in terms of the strategy. We are longer-term strategists, so we kind of apply all our business knowledge and all the business strategies that we’ve learned over the years, and we just applied that to online. So, going back to that idea of, you know, I saw Corey Rudel, I saw this affiliate marketing thing, I saw eBooks, we realized the internet is growing. This is a new marketplace and this is somewhere where we need to be. And reasonably quickly after we kind of learned the ropes from people like that, figuring out, okay, how does this all work? Launched our first website. And then it was me saying, do I have to do that again? Why can’t we just buy an asset? Why can’t we buy something that’s already done? And that’s the basis of our strategy. Same thing we did with property, the same thing we did with business. Find these websites that are making money on autopilot as much as possible. So making their money from advertising or from eBooks or information or from affiliate programs so we’re not holding any stock, we’re just recommending people through to places where they can buy specific things. like Amazon. So we partnered with the world’s biggest companies like Google and Amazon, big blue-chip companies to sell this stuff basically for commission.
That’s very smart because then you don’t have to necessarily go out and actually set up the products and hold the stock and become more or less like an eCommerce store, which also has its other risks as well too.
Yes we go to Amazon, have a look and see what’s the best selling thing on Amazon and we say ‘let’s promote that’.
As there are endless websites online, the couple discusses how they implement a strategy that enables them to find the particular sites they want.
First of all it was the monetization. So we had to figure out, okay, is it being monetized in a way, making its money in a way that is nice and leveraged for us that we understand. So because my foundation was that sort of affiliate marketing and eBooks strategy, I was looking for sites like that. I understood how they made their money.
And advertising Google AdSense sites.
Yes so first of all monetization. The second thing is that what we’re looking for is a system. It’s like finding a house that’s already been built. So rather than buying off the plan, what we’re looking for is a house that’s already been built. So we want the website to be built, we want people finding that website.
We want it to be ranking in search engines like Google for specific search terms around that particular topic. So we had a couple of websites recently that were around cars and new cars and what their features were. And so we need to check that that website is actually bringing in that ranking for the right keywords in the search engine. So if someone types in new Mitsubishi, ASX 2000 and whatever, does this website come up in the search engines somewhere. And are people finding this website, and the questions that we ask, the main question we ask when we’re filtering through, we’re looking for those evergreen niches. The ones where people are always going to be looking up cars, they’re always going to be looking up health stuff. They’re always going to be searching, health, wealth and happiness is basically our go to places, which is anything to do with your relationships and happiness in that way. Hobbies and passions. So they are easy to understand. You know how it’s so much easier to buy a property when you’re first starting out. It’s much easier to buy the sort of property that you would actually yourself buy. So rather than jumping straight to commercial, maybe you would go buy a little flat, because I understand what that is. I know who would rent it. I understand how to renovate it. So it’s a bit easier to do that than maybe a big commercial buy.
Matt and Liz Raad explain how commercial and residential is a completely different game in terms of market, and there are multiple factors that are taken into consideration.
Yeah, same thing. So, you know, there’s lots of sites. Like that student who bought a site about trampolines, you know, just reviewing trampolines. And you can imagine when someone wants to buy a trampoline, there’s lots of questions you have around buying that trampoline. Is it safe? How big do I need it? What are the best ones? What are the safest ones? What are the most expensive or cheapest ones? What’s the best value for money? What are the different brands? There’s so many questions and really the key to success and what we understood right from the beginning is when you look for a website to buy, you’re buying something that’s answering a question or solving a problem. And that’s the key to making money online, answer questions and solve problems.
It’s that simple. So why aren’t many people doing it?
It surprises us actually how many of our students we have to take through that process of ‘remember guys, you’ve got to get in other people’s heads’. What are they looking for? I think that skill of empathy is something that a lot of people don’t realize is so important in business that you have to understand other people and understand what’s their problem, what are they looking for? How can I help? The whole basis of what we do every day, I think, how can I help someone? How can I make life a bit easier for them? Give them the answer to something they really want to know. And I think if you come at it from that angle, it’s a totally different ballgame.
In order to solve people’s problems effectively, the online experts have to determine which sites to buy, by identifying how much value they have.
When you first start out, it’s much safer to buy the ones that have profit already, because there are some topics that are difficult to monetize or difficult, you know, styles of websites that are difficult to monetize. So it’s much safer if you stick with, in the beginning, sticking with those websites that have easy to understand topics that are proven money makers. And you can do that by buying websites that already have profit because they’ve proven themselves in the marketplace. You can see that they work and the whole point of buying a website is to bypass all that startup stuff. All the testing and all the, you know, will this work and will it not, is this the right topic and so on. That’s all been done.
And we can see that when we do the due diligence on the website. So the way we value it, a starting point, and it’s a very rough rule of thumb here, but basically websites are very just like any traditional business asset and it’s a return on the monthly profit. So it’s a multiplier of the profits. So what we say to beginners, when you start out currently in the market, it’s about a 20 times a monthly profit. So if a website’s making $1,000 a month, then it will probably sell anywhere around that sort of 15 to $30,000.
Depending how automated it is, how much history it has. Because also of course the value is very much based on how secure this site is, how likely it is to keep making that money into the future.
After buying and selling properties over the years, Matt and Liz Raad share their strategy on building up a portfolio.
-Matt and Liz Raad
I wouldn’t actually go on our journey because we’ve owned a lot of websites and you don’t actually need to nowadays. So we’ve revised our strategy over the years as the market has changed and what we suggest for our students is 10 to 15 good websites is a really nice portfolio. And those websites might be making anywhere from a few hundred dollars a month up to $10,000 a month. But having that, again, you can see where we’re very much security oriented. So rather than focusing all our efforts into one big website, we tend to portfolio it. And so we have a whole range of websites making all different amounts per month. And I will still buy small websites. So if it is a $5,000 website that’s got $1,000 a month, you wouldn’t get that nowadays but you used to, but even, you know, a few hundred dollars a month, but if it’s a good buy and I like the niche, I’ll still buy it. Because $5,000 in a website is going to return in more than $5,000 in the bank. But yeah, so to give you an idea, we have superfluous websites, we don’t really need to have as many.
With having properties online, you don’t have to leverage too much yourself. You don’t have to go to the bank and borrow 20%, which you need on average and say a property in Sydney is $200,000. You could easily buy $200,000 worth of websites to generate that kind of income.
Yes. The returns at the moment on websites are phenomenal, we haven’t seen turn outs like this before. It’s a very high growth market as well at the moment. We’ve seen huge growth over the last 10 years. We value them on monthly profits. So if it’s making $1,000 a month, a into 12 times that, so $10,000 for a website making $1,000 a month, then we’d renovate it and our goal is always double it, which we can usually do, often we’ll triple it. And so if you double that, you’ve paid it off in five months and then it’s just income.
I do want to point out that we’re experienced, and there’s a lot to learn for most people, even for experienced people. So we know a bunch of Seos and we keep saying to them, why are you not buying websites? It’s a no brainer. You can do good due diligence, you can see it, you can renovate a site, and you do need experience, like you need to build up your experience. And this is the thing that we’re excited about, why we love it compared to when we used to sell bricks and mortar businesses. Minimum buying on a bricks and mortar business for a decent one is $500,000 to a million plus. With websites, we can get people started buying just little $500 websites and sure it’s not going to make them money as such, but the learning process, what they go through is exactly what you need to do when you want to start adding zeros to that thousand dollar websites or $50,000 websites or bigger websites.
So the good thing is whilst there’s technical stuff to learn to make money online, it’s in a small buying price and practice on small sites. Unlike say with property you can’t practice on a $5,000 property. It’s not possible out there. Well not as far as I’m aware. Whereas with websites, so it’s pretty safe, you’re not going to hurt yourself in the learning phase. Once you get good at this, then you start as we know it. As you can imagine, you’ve got to look at a lot of deals to get the good ones. It’s not every single day. Although I will say there’s a lot more websites out there now and there’s a lot more website brokers out there and currently in the current market in particular, you will see a flood of good websites being sold. Property websites will be sold and shared under value over the next six months in my opinion, knocking financial advice. But I think there’s going to be some really good opportunities out there.
Having real estate online essentially acts as an insurance, especially during hard financial times when properties are no longer accessible.
Yeah, it’s the way it is, the market of the future is online. Like, look at Amazon now. It is just growing because of what’s happening in the world right now, the online marketplace is just going to boom even further on the internet, what is it? Internet traffic is up 30% just in the last couple of weeks. This is almost pushing everyone into that online space. So I think we’re going to see even more growth coming in the next few years.
Throughout Matt and Liz Raad’s journey, they have developed personal mindsets that have ultimately affected the success of their online businesses.
That’s easy for me, my biggest influence in terms of mindset. Just like attitude and things like that…I’ve done a lot of mindset work on myself over the years since I left home. And when I was in Sydney, since I was 18 years old I realized I had to fix myself up and then becoming an entrepreneur, as a successful entrepreneur, there’s a lot of mindset blockages that I had to overcome. So I’ve read lots and lots of books, but I guess one of my big influences is seriously someone like Arnold Schwarzenegger. Because I looked at him and just really admired him because he started with nothing, absolutely nothing. And he became who he was and incredibly successful in all areas of his life. And he did it purely through the power of his mind, just sheer willpower. And I think that for me, that his journey has helped me enormously.
Have you read his autobiography?
Yes I’ve read everything. I’m looking at his book right now. There’s a poster on my wall and
I’ve got all his books, everything. Yeah. So I know every little story about Arnold, for the last 25 years.
He was a very big influence on us as well in that, you know, it was a long time ago when we read his books and it was just reinforcing that idea of buying yourself cashflow by yourself, investments that return cash flow don’t work too hard. And that, that was something that I think was really important in our journey to the people. They forget that they don’t have to work as hard as they are and when they buy themselves an investment or something like that, we see it over and over again. They buy themselves in other jobs. They by themselves work because that’s what they know, I think. And so we were always very conscious of the fact that we’re buying ourselves an investment and if we’re going to grow it and we’re going to sell it, are we going to make income from this? And that idea of buying investments, not a job.
Excellent. Do you think that would have been the best advice you’ve ever received or have you received other advice from other people that you’d like to share?
Well, for me it was to learn how to value a business. And it was from hanging around all those very successful business owners who are back in Sydney and understanding how to value assets and I guess also a big influence for us was Warren Buffet and obviously that’s a big part of how he’s made his wealth in life. So I guess in terms of the big pivotal mindset shift or the big pivotal thing, the advice that I was given as an entrepreneur was definitely around understanding how to value business and for Liz I would say assets and how to value it. It’s been an enormously good money making skill to have for us on our entrepreneurial journey.
Looking back on their journey, it is inevitable to develop personal habits along the way that have contributed to their successes.
I reckon the biggest thing for us is consistency, just every day doing something, no matter what’s happening in life especially. That’s fine now, but it was back in the days when it was hard. When you felt like giving up, when things weren’t working or you didn’t have much money. It was at that time where habit was the most valuable because we didn’t give up. We always had that bigger picture in our mind and we always showed up.
Well that’s the other important part. Atleast what was just touched on, probably even more important than that is having that personal vision. So that’s a big thing, we learnt this off Arnold Schwarzenegger, he had a big vision and for us, like we said, the vision then led to the consistency and Arnie always says, and we use this all time reps, reps, reps just turn up, do the stuff the more you don’t feel like doing it because it’s all feeding back to your vision. So for us, I know my vision, I’ve looked at it for the last 25 years. It’s in my wallet, it’s on my Evernote, it’s everywhere. We talk about it daily. Our kids know what our vision is and we’re constantly tweaking it. And I think that’s probably the number one strategy that led to our success. We both luckily have a very strong shared vision and we consistently work to it.
Wow. That is amazing. Would you mind sharing with us that vision because it would inspire a lot of us, including myself.
I mean there’s a fair bit to it. It’s not like it’s one thing because we look at life. Health, wealth and happiness. So we look at our life and for me the vision is actually a lot about the feelings that I want to feel every day. So it’s funny, Matt and I are driven slightly differently. So I’m not actually as driven by money as Matt. I didn’t have an underprivileged background so money wasn’t the massive driver for me. It was more that feeling of freedom, that feeling of being able to do the things that I wanted to do, do the things that inspired and excited me going on adventures feeling joy, moments of joy.
And I know that in order to create that I need to achieve certain things even down onto a daily basis. But I bring those feelings I got, I’ve designed my life so that I can bring those feelings into today. And I think that was what the connector was for me. Because back when we had nothing and we were really struggling sometimes, it’s really hard when you’re in that moment, when you’re in that situation, the vision seems so far away and so remote that you feel a bit disconnected to it. And even though I knew where we wanted to get to, we wanted that freedom. Those were things as well. I think it was the house we wanted, this particular house, we wanted to live in the bush. We wanted to live amongst wonderful people. There’s all those elements of what we wanted.
We wanted to be able to buy the things that we want to buy. I wanted the freedom to be able to go to a shop and not even really care what the price was of whatever it is. So sometimes it’s those little things. Because I’m not driven by owning Ferraris or all that sort of stuff. It’s more those day to day feelings of freedom and joy. And so I bring that into my life. Even though when we had nothing, we’d still go off into the bush and spend a day just loving our time, like walking together, dreaming together, doing things each day that brought those wonderful feelings. And so we knew we were on the right path.
For me you got to be able to do the uncomfortable things. In everybody’s journey, you’re going to get uncomfortable. There’s going to be stuff that you really don’t want to do. But if I can just know that once I’ve done that, I’m a step closer to where I want to be. No matter how big or small that is, then you’ll do it.
My vision is around Arnie, like in that I haven’t broken up and I learned this off some of the personal mentors that I had back in Sydney. So I’d break down areas of my life. So how I work, how much money I earn or investments do I have, but how’s my daily day look like? How much time do I have to turn up to work for what I want in my family? If we’ve got young kids how do I want my kids to be? How do I want to turn up in my relationships, relationships with Liz, relationships with kids in my community? So I guess they’re the classic goal settings that you read about in all those goals in books, which I’ve read all of them. And that’s how I created it. I’ve come to kind of call it the master plan, because Arnie had his master plan way back. Not a lot of people know this, but way back when he first landed in America, he had this master plan and he ticked off every single thing. And it’s funny now I look back, I just turned 50 at the beginning of this year and when I look back over my master plan from that I set out, I don’t know when I was 20 or around that age, I’ve achieved pretty much 95% of everything that I wrote down. So that’s pretty cool. So it works. Setting goals, vision setting works really well.
And that’s so great that you could share that with us. Thank you so much for that. Now the last question I have. How much of your success is due to skill, intelligence and hard work and how much of it is because of luck?
I’m that kind of person who believes we create our own luck. So it’s, it’s definitely skill. It doesn’t, I don’t think it’s necessarily intelligence because I have an academic brain. I don’t have a business brain as such and certainly not a sales brain. And so I had to learn a lot of stuff. I did not take the easy path. And I wasn’t necessarily automatically, naturally skilled at what we did in business. So I think it’s intention and commitment and focus. Discipline.
They’re our keywords, Tyrone. They’re written on our wall. There are personal keywords, intention, focus, commitment, consistency. But for me too, I’ve got to admit for me, I look back at my life now and I’ve got this from my granddad. I am an optimist and I don’t look back at my past, I don’t like looking back at my past. And as Arnold is, he’s exactly the same. He tends to only live in an hour. Look forward. And I’m the same. But when I did turn 50 I did look back at my past and I realized, man, I am so lucky. But then as Liz would point out, well you make your own luck. And it’s funny, I’ve kind of forgotten my past a little bit of how the hard times and all that sort of stuff happened because I tend to paint it with rose coloured glasses. But like Liz, I think it’s down to our consistency and hard work in its time. But I do acknowledge that I have been lucky, but I think I’ve made my luck.
What is the best way our viewers can reach out to you and find out a bit more about your program as well as your online businesses?
Well you can go and check out where we launched the eBusiness Institute and there is lots more about how we do things and what we do. Or if you want to know if you have a question or anything like that, you can connect with us on Facebook, Matt and Liz Raad and we’re happy to help.
And I’d recommend doing a free training, if your listeners want to take this further, we’ve got free training on our eBusiness Institute. They can go through some online courses there and learn basically the overriding strategy of what we do, of how we buy and renovate the websites
I feel like yeah the next thing, or the next phase of our journey is that we were inspired to help other people achieve this as well and hopefully make it a lot easier, faster even.