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If I want to make $300,000 in the next 5 to 10 years using one domain, how much should I invest now?

Labeled as question in Domain Beginners, started by Dancing Tree, Aug 2, 2020

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  1. Dancing Tree

    Dancing Tree New Member

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    Hello Digital Warriors.

    I come from real estate and I have arrived here to invest in some digital real estate. I have the patience of a standing tree and this is my idea of a long term passive strategy. Please review.

    One Domain.
    I want to to just buy it right and I most likely will use the services of some brokers to find the best possible domain name at a investor price and wait 5 to 10 years for the right buyer to give me the best retail price. Of course a big part of the strategy would have to do with the quality of the domain and buying it right. I'm very patient and I can wait for the right seller and I can certainly wait for the right buyer.

    I have two questions that I would love to get some feedback on please.

    1) How much should I expect to pay as an investor now if I want to see a return of around $300,000 in the next 5 to 10 years?

    2) What sort of qualities should I focus on this one domain so that I can maximize my chances on seeing a nice return on my investment?
    ( Here are some of the general rules I have so far : Aged .com + short generic word with infinite usage possibilities, words that will always retain their value. Feel free to critique or recommend what I should focus on this one Domain to rule them all )
     
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  2. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    One-word .COM domains sold to a well-funded tech start-up could yield a nice ROI but expected holding period might be 15-20 years. Research DNJournal.com and Namebio.com to see six-figure sales in recent years. Since you have a real estate background you might feel more comfortable with large city or real estate .com domains - which will not be available at a discount. Regardless, there are individuals who have converted such domains into viable businesses - more capital required but at least you would not need to depend on the perfect buyer who may never show up.
     
  3. sansmidman

    sansmidman Established Member

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    By the time more capital and more work is involved into developing a viable business, it is no longer a passive strategy like what OP seems to prefer.
     
  4. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    You need to spend a few months learning about domains and what makes them valuable.

    Your ROI depends on the quality of name you buy.

    My advice is to stick to .COM
    Avoid hypens, numbers, hacks, trademarks
     
  5. Ategy

    Ategy NameCult.com TheDomainSocial.com VIP Gold Account

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    There are so many different paths to success in domain investing. However for every one that ends up in success, there are 10 more that end in failure.

    Unfortunately there is absolutely no way for you to grasp what domains to get in a single namepros thread in a single day.

    The answer to your question is effectively: "take a few weeks to read as much as possible on namepros .. then also go listen to old Domain Sherpa Reviews for the last several years as well as other podcasts, etc etc, etc.

    If you want the "theoretical math" answer, then this is one potential path .. but again I need to warn anyone reading this .. it takes time to get to theoretical levels.

    In this simulation it would take 6-7 years to hit 300k profit. With a peak investment of $41k total (after 1.5 years .. after which you'd start making more than you spend). It's basically buying 5 domains a day at an average cost of $30 and selling 1% a year at an average sale of $2500 (commissions not included)

    DomainMath-DancingTree.jpg
    Details:
    http://namecult.com/turning-10000-into-1000000-in-6-years-of-domaining/


    .
     
  6. WatchDogue

    WatchDogue Top Contributor VIP

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    In your 2nd question you mentioned acquiring a name with " infinite " usage possibilities. If I wrote that question I might substitute " multiple " usage possibilities as being more realistic of a name's potential.

    I believe your goals are admirable although perhaps if I were in your position I might also consider acquiring 2,3 or 4 names with a long term projected aggregate ROI approximating target 300000.

    As mentioned you might best be served by studying up on the big name sales over the past few years to assist in your name projection and you might scroll through the NP Blog section and see if any of the sales Blog threads might be insightful in your goal.
     
  7. Dancing Tree

    Dancing Tree New Member

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    Are you essentially suggesting to focus more on words that would be beneficial in the tech industry? What I didn't know is that it would take 15-20 years.

    Correct me if I'm wrong but I believe all things just like in real estate, the complexities can be scaled up to a high degree where one needs months and years to master it but at a foundational level, the factors that determine the core value are often very simple and basic, aren't they? Like the ones you mentioned. .Com No hypens or numbers or hacks. Absolutely 100% dependent on the quality of the value for the ROI for sure. The combination of good quality and the right buyer. Assuming I got a quality domain and assuming I will find the right buyer, what do you expect I should invest in a domain now to see that kind of ROI?

    That was a very informative read. Thanks.I think I'm approaching this exactly like a real estate investment. 90% of the work is buying right in real estate, so in that regard "knowing" as much as possible is always helpful. You could spend years in real estate trying to understand all the little complexities but what determines the true value of a property are not that complex.

    In my strategy of having One domain and being extremely passive with it basically would mean I'm betting everything on the "quality" of the domain. The value of the domain does not need to be sold nor does it need an ad page. The kind of quality where buyers will find you. I'm just not clear how much I should expect to pay for such a domain.

    I can tell you are a cool human. I know these things. I'm really curious as to why you suggest acquiring 2,3 or 4 names instead of One? Is it the risk factor? Or is it increasing your chances on ROI on multiple good digital real estate properties? May I share my thinking with you? The idea of One domain was straight up stolen from my real estate experiences. I put everything I had into my first property buy and I was able to get a fantastic ROI on it which I then reinvested into the next project. Putting all my financial resources into The One domain allows me to get a much higher quality domain than getting 4 relatively premium ones, does it not? Doesn't it increases my chances of getting a much higher ROI than 4 lower grade premium ones? To me, luck is always a key element in investing as factors outside your imagination can come around to change things. This is also why I'm very confident about the One Domain approach because I married Lady Luck
     
  8. blogspotter

    blogspotter Top Contributor VIP ★★★★★★★★★★

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    I am very new to domaining but I have bought a few good domains in my time, but never followed the industry, read/analyzed about stuff etc until recently. But here is my understanding from what I have gathered in the past few weeks.

    You buy lots of brandable domains and wait for some company to come along who likes that domain enough to shell out around 999 to 19999. No Rhyme or reason. All made up domains that sound good are equal in value, until the right buyer comes aling and hence their acquisition costs are 5-100 usd. It is a lottery.

    And then there are the 2 letter words. Good 2 letter words fetch a tidy sum. Most of the super premium ones are all in the stable of old domainers waiting for the right buyer.

    Same for good Domains hacks.

    Single letter words, noone will sell you at a investor price. It is a closed industry and someone who wants to liquidate them for any reason will do so in private and in bulk most likely. You need to be active and have good networks to get access to those. Even then it will not be cheap, because everyone the knows the value of single word .com

    I think your best bet for semi premium 100K domains will be in the Drop catch Auctions and you will need to pateint and wait for the right domains and the right price and you will most likely need to spread out.

    Everyone knows which premium domains are dropping, so I doubt if you will be able to get a premium single word .com using a public drop catch service, but you will get good domain if you keep your eye open. I am willing spend upto 10K for good auction domains but for now I am focussing on 1000 usd domains.

    Lastly the best bet is to keep a lookout for Trends.
    There are many Fads and trends that suddenly get viral. if you have a quick eye, you can profit from trends.
    Crypto Boom, CBD boom, Keto Boom have given several people xx,xxx sales.
     
  9. BlueJay

    BlueJay New Member

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    The thing with domains is that there's a huge amount of variability.

    If a knowledgeable domain buyer buys let's say 10 domains for $500 each, it's hard to predict which ones will sell in the 5-figures ($xx,xxx) and which may only sell in the 4-figures ($x,xxx) (or I suppose possibly even under $1000, but that's unlikely if someone knows how to find good deals).

    I've sold domains in the 5-figures ($xx,xxx) that if I posted for sale on NamePros, I doubt anyone would even buy for $1000. With domain names, the baseline selling price can be a lot lower than a "ideal buyer comes along" selling price (aka "reseller price" vs "retail price").


    In comparison, with real estate, the baseline selling price probably isn't hugely lower than the ideal-buyer selling price. If you look at some real estate and if an appraisal says the value is $100,000, the selling price probably will be in the $80k to $120k range.

    But with domains, the range for a likely selling price is very wide, because it's hard to really predict in a pinpointed way. For a domain that I think can maybe sell for $25k, if you ask me to give a range in which I'm 90% certain the domain might sell at, the range would probably be anywhere from $5k to $50k.

    It's very unpredictable and there's a lot of variability, so I think people are basically suggesting "not to put all your eggs in one basket".


    The other issue is: How often do domains sell for over $500,000? Not that often really (probably less than 10 per year).

    There are of course many sales that don't get reported. But if you want $300k profit, maybe you can buy a domain for $400k and sell for $700k later, but the problems are: 1) Finding the right domain for $400k (a lot of them are probably already in the hands of people/companies who know the domains are very valuable), and 2) Finding a buyer later for $700k.

    There can also be a problem of liquidity, especially at higher prices... if you buy a domain at $400k, there is some chance that you won't find a buyer even at $400k, and you may need to sell for less. If you can afford to wait for the right buyer to come along though, that will help, but as other said, it may take a lot longer than even 5 years.

    PS I sent you a direct message too (can view your NP mail by clicking "Messages" in the top-right corner).
     
    Last edited: Aug 3, 2020
  10. scrsteven

    scrsteven Top Member PRO VIP ICA Member ★★★★★★★★★★

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    With tons of assumptions baked in here, to have a reasonable chance (greater than 10% but under 50%) of selling one name within 10 years for a $300K profit, you're probably looking for a one word .com with a minimum current wholesale value (what you pay) of $150-200K, with a goal retail sale of $450-500K.
     
  11. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    The more research and $$ you put in, the easier it is to make a decent profit

    If you try and hand-register available names for $10, you will end up losing money. If you go and spend x,xxx on a decent name with lots of end-users, then it will easier to sell and the profit will be higher if you negotiate properly.

    I would forget about the 300k earnings and focus on a smaller amount like $5k, but a decent name or two and try and sell them to make a profit. The 300k is just a dream at the moment and a long way off. Set smaller goals/targets and reach them first, then reinvest your profits into better names.

    Make sure you have a list of end-users BEFORE buying a name, a lot of people here dont do that and then end up being stuck with a name(s) they cant sell.

    Dont buy names you like, try and look at it from a company POV, would they use that name to brand their business around?? Is it short, is it catchy, is it brandable? Just because a domainer likes a name, doesnt mean a business will.

    Good luck
     
    Last edited: Aug 3, 2020
  12. shojib

    shojib Top Contributor VIP

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    You need to spend a few months learning about domains and what makes them valuable.
     
  13. lock

    lock DomainUsed.com VIP

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    Buy for 3 million sell for 3,300,000. Or do it with multiple domains rather just inflation.
     
  14. CraigD

    CraigD 360promo.com VIP

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    I'd invest in 5-10 good short generic word dot coms.
    You might get lucky with a couple of them.
     
  15. lock

    lock DomainUsed.com VIP

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    All hypothetical so not many will entertain your idea as newbie mentality.
     
  16. Ankush De

    Ankush De Established Member

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    I would suggest you in invest in short good names like 2L, 3L com's.

    Also, focus on high premium single dictionary words.

    You will be at no loss and with high changes you earn double the $300000 in next 5 to 10 yrs.
     
    Last edited: Aug 3, 2020
  17. TauseefKhan

    TauseefKhan Upgraded Member Blue Account

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    I think - you should talk to well-established brokers in the domain industry.

    Ok, here I go:

    1. Focus on English Dictionary single words that are positive in meaning, short, available to buy from a non-domain-investor. And at least 10+ potential end users you should be able to find. (Potential - what I mean here is the list of end-users who have deep-pocket and are willing to invest in a killer domain name)

    2. At least super-premium quality of a couple of domains should produce the results you're expecting. IMHO

    Some interesting domain stories:
    https://dsad.com/breaking-richard-dynas-dynas-domains-sells-hatred-com-150000-milo-yiannopoulos/
    http://www.dnjournal.com/archive/lowdown/2018/dailyposts/20180307.htm
    More stories at http://www.dnjournal.com/lowdown.htm
    https://www.domainsherpa.com/steve-jones-domainate-interview/ for due diligence.
     
  18. Ostrados

    Ostrados EpicName.com VIP

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    Spending all your money on one expensive domain is gambling..
    Spending your money on a collection of high quality domains is investing..

    Dont put all of your eggs in one basket, In domaining quantity is needed along with quality. if you have good starting capital then you can start by investing in 50-100 high quality domains. Diversity is also very important, try to invest in a mixup of (dictionary words, 2 words, 4Ls, 3Ls) and stick with .com.

    And as others mentioned do not jump in domaining before reading a lot and doing a lot of research, domaining is not about making money fast but the opposite and needs a lot of patience.
     
    Last edited: Aug 3, 2020
  19. slader23

    slader23 Always On The Bleeding Edge. VIP

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    Here are my three simple steps:

    1. Study.
    2. Study..
    3. Study...


    Once you've perfected the art of domain valuation and strategy you'll be in an excellent position to meet your goal of $300k return. In domaining...all the money is made on the buy.

    I'm not going to tell you how to invest your money. There are many, many ways you could play this out but what really matters is you completely understanding what you're buying before you buy it, it's value and the chances of it selling at your desired price given a specific time horizon. The only way to get to that point much like in any other business is through studying and hard work.

    Good luck!
     
  20. Reddstagg

    Reddstagg Top Contributor VIP Gold Account

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    Good morning.

    Just as a basic reality check, but imagine that the date was 2010 and you had just started your journey with an expected end date of 2020. This has been the year that potentially could change the world we live in and in ways that we don't fully understand yet.

    Many property developers that I am aware of would rather have 10 properties with a value of $10,000 each rather than one property valued at $100,000. This allows a certain degree of flexibility and if the properties are held and rented out a return of investment of around 6% per annum would be a good industry average. However, in a perfect world it may be more financially viable and easier to sell one property rather than 10. We do nit live in a perfect world.

    Money is not the only factor in this equation. Just as important is how much time and effort you are prepared to put into your endeavour. I'd say you would be wise to consider putting the time and effort in now before you make any investment. It is widely accepted that good names sell themselves. This is true to a degree but it still takes experience and knowledge to get the best return on investment.

    You could have the swankiest apartment in town but if you don't know how to market it and to whom it will still be worth $100,000 at the beginning but it will sit unsold and may diminish in value over time. A smarter real estate broker would already have a list of potential purchasers and they would probably be contacting him or her rather than the other way around. Smart buyers are usually ahead of the curve.

    Do you still feel lucky? Well, do you?

    Enjoy your journey and come back in 10 years and tell us how you got on.

    Regards,

    Reddstagg
     
  21. tonyk2000

    tonyk2000 Top Contributor VIP ★★★★★★★★★★

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    The question is what would $300,000 mean in the next 5 or so years... And will this particular currency (USD), printed in this particular country (U.S.), still exist... :
    https://www.usdebtclock.org
     
    Last edited: Aug 3, 2020
  22. WatchDogue

    WatchDogue Top Contributor VIP

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    My thought on acquiring 2,3,4 domains rather than 1 domain was based both on the perceived risk factors of going " all in " on one domain with a 5-10 year hold for a sizable ROI vs acquiring a few high quality names whose aggregate 5-10 year hold / ROI may be more predictable and profitable and a less worse case scenario risk.

    Let me state emphatically, I am a firm believer in people pursuing their goals and admire those willing
    to take a real risk to achieve a goal, be it business, personal, whatever.

    I see "The One" as an admirable business goal you have set for yourself.

    If buying a relatively high ticket domain name today to compete and succeed in a future unknown and hard-to-predict domain marketplace 5 - 10 years from now is a risk you are willing to take, I sincerely admire your courage of conviction.
     
  23. has2hands

    has2hands VIP Member VIP ICA Member ★★★★★★★★★★

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  24. Ategy

    Ategy NameCult.com TheDomainSocial.com VIP Gold Account

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    I think the biggest piece of information missing for anyone to help you is your actual budget. If you have a mid-high 5-figure budget cash in hand ready to invest right now then I would take the "small number of super premium domains" approach. I gave you a different model because most people don't walk into the industry with 50k-100k cash.

    What @WatchDogue says about breaking it down into a handful of domains seems a little counter intuitive, but makes sense depending on your true goals. If you really are about buying one domain and not doing anything else in the industry, then getting one isn't bad. But domaining is a numbers game where there is some luck involved. The one advantage about spreading and diversifying is that you spread your chances of making end-user sales. Because at the end of the day if you invest in just one domain, even a good one might not sell at end-user "optimal return" within 5 years.


    Ultimately you simply did NOT give the pertinent information needed to get good personalised advice from anyone here. We're all just guessing until you actually share what your starting budget is, and is you truly don't need or want a penny in return for as long as 10 years. If your answers to both are $100k and that you don't need/want any return for up to 10 years, then you're very far from the typical newcomer, and you might want to clarify those questions before taking any advice from anyone in the industry (including myself .. lol)


    NO! That is the biggest mistake people make entering the industry.

    YES there are simple principles you can use to eliminate as much of 95-98% of the garbage out there. But even within the final 2-5% of domains that remain, the vast majority are either garbage or simply bad investments at the price they are available to you at.

    So most people jump into the industry .. learn about the first (easiest) filtration to eliminate 98% of bad domains and then automatically think they can make money with the final 2%. But the truth is you need to get that down to a tenth of that or less. Even once you get there it's still a lot of time and work and not the easy money people think it is.

    With one word domains however, the process of judging potential value is easier because the domains are simply less complex .. so if you're starting with $50k+ cash in hand .. that's probably the route where you stand to make the least possible mistakes (keeping in mind it's still very easy to make huge mistakes with one word domains).
     
    Last edited: Aug 4, 2020
  25. rajdomains

    rajdomains Established Member

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    I think buying any good/pronounceable 3 letters or 4 letters .com domain may able to give you a good return in the future.
    It should be a meaningful budget for buying domain should be $20k to $50k.

    Invest in a Good and meaningful domain.

    Digitalization is increasing though demand for domains will also increase I think 6 figures sales may become normal in the near future.

    VIVO.COM Sold for $2.1M, so if you invest in any good similar domain than the right buyer can pay you a handsome amount in the future.
     

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