I discovered website flipping can be extremely profitable, and buying and selling domain names and web businesses is absolutely booming. In short the aim of the game is… buy good websites cheaply, and sell them for 2 to 3 times what you paid.

But how can you be sure you’re buying a good value website at a cheap price?

Here’s a few tips if you’re starting on the Flippa.com market place.

Like any auction, you need to set your ceiling price and do your due dilligence to ensure you are buying quality.  There are a couple of tools and techniques we recommend to get you website flipping started properly.

SEMRush will show you the top ten keywords the auctioned site is ranking for.  You can compare these to the keywords referenced by the seller, as well as doing some keyword research to see how competitive these keywords would be to rank fo. Ask yourself how much would it cost you to purchase this traffic.

The “Open Site Explorer” in SEO Moz will show you the backlink profile of the website you may be looking at.  You will want to know what backlinks are pointing at the site, how many, and the source of the backlinks.

Look for a decent spread of backlinks, you don’t want to see them all coming from the same source or link network.

Analyse the stats of the website, especially the traffic sources.  The owner will most likely quote some site performance statistics, but ask for Google Analytics data as well.

If the site’s traffic is all coming from pay-per-click networks like Adwords, be sure the site is making good money!  If you’re not careful, you could find yourself spending more on traffic than the site returns in revenue.

Check out the owner of the site.  Whois can give you some information, but Googling the owner’s real name can give you some good information as well.  Check out their Facebook profile and other SERPs to see if they match the owner’s Flippa information.

If you were buying an actual income-producing piece of real estate, you would likely do some due diligence.  Do exactly the same work here.  In real estate, share and stock trading, and website flipping … you should make a profit when you buy!

Now for the burning question – how much should I pay for a website to flip?

This is not an easy question. Buying and selling websites isn’t a liquid market with set valuations. As a rule of thumb, consider an offer of 10x the monthly revenue or I like to guestimate  much money I think I can make from the site in 3 months. If I can get back to break even within 3 months I’m happy… everything after that is profit 🙂

Anyway just something ideas… if reading a long post like this takes more time and focus than you have, check out my interview with Luke Moulton on the subject or if you’re looking to learn all my secrets visit: www.bbsformula.com