As you know, I’m excited about alternative investments like peer-to-peer lending. And if your aim is to replace your income, I think it makes sense to invest for cash flow.
This week’s Side Hustle Show guest argues when you want something in other areas of your life, you go out and buy it: a pair of shoes, a computer, a new car. You don’t make it from scratch!
So why are we so insistent on building income from scratch? He says there’s a faster way, and that’s to “buy” assets that are already generating positive cash flow.
In the stock market, that could be something like dividend stocks.
In the real estate world, the common example is a rental property where the rent exceeds your mortgage and insurance. Like Elizabeth Colegrove explained in episode 148, you’re happy to get a 14-20% cash-on-cash return.
But in the world of digital real estate — online businesses and income-producing websites — the ROI figures are much more attractive. Think 30-100% cash-on-cash returns.
Naturally, these investments are riskier, but have some advantages as well. Namely, no problem tenants, leaky toilets, or rodent infestations.
Ace Chapman is the go-to guy when it comes to evaluating these deals and making them happen. He’s bought and sold more than 100 different Internet businesses, and stops by The Side Hustle Show to give us an inside look at his criteria, process, and advice for people getting started.
Don’t have the budget to buy an online business? You can use my free video course and start your own on the cheap.
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“It’s not about buying a business; it’s about building a business of buying businesses.” –@acechapman <– click to tweet!
- Ace’s favorite marketplaces for sourcing potential investments, plus his “hidden market” strategy.
- The initial investment he suggests for people getting into this business.
- Some creative financing and deal structure options to minimize your out of pocket costs.
- How he looks for areas of growth opportunity in each deal he evaluates.
- His takeaways from 3 deals that backfired.
- Some resources to help with your due diligence.
- Ace’s #1 tip for Side Hustle Nation.
- The Ace Formula: How to Buy a Business
- WebEquityShow.com | Due Diligence episode
- EmpireFlippers.com | My interview with Justin on The Side Hustle Show
- Post-mortem of my money-losing Empire Flippers deal
What do you think? Viable side hustle for you? Could you replace your current income by buying a business like Ace suggests?
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