I’ve been trawling Flippa’s listing pages since 2012, which puts me firmly in the “unconsciously competent” stage of competence. In other words, I can look at a listing and use my gut instincts and other skills I’m not even aware I’m using, to determine if this might be a good or bad deal.

This type of competency takes time to build, which might be disheartening for those of you who are new to the game.

One of the most intimidating parts of entering the website investing space is due diligence. Put another way, the scariest thing is getting ripped off, or buying a lemon. It can take some time before you become comfortable enough with the process.

That said, there are ways you can speed up your learning curve. There’s a lot more information available in 2020 than there was 8 years ago. The market has grown, more people create content around buying online businesses, and there are more tools available to assist you as well.

Start with Flippa

When starting due diligence: read the listing comments. This will help you learn what is important to most buyers on Flippa Click To Tweet

Aside from the Flippa blog, which you’re obviously familiar with already, a great source of insight  can be found reading the comments on particular listings. Sometimes these comments are uninformed noise, but most of the time, people ask insightful questions. 

By learning the kinds of questions people ask, and the variety of answers given, you start to learn what’s important to most buyers, which is usually something that would be important to you too.

In fact, the more listings you read in general, the more you’ll learn. You’ll see the twists people put on their sales pitches, you’ll see the types of businesses that are for sale and how they’re monetized, and you’ll learn why some businesses seem incredibly popular, while others get no real interest.

Even if you don’t get all the answers, you’ll start to learn the questions.

Other Content Sites

There are other blogs you can read as well. Brokers may have good content which covers the nuances of buying or selling a business, and a lot of that involves valuations. This article written by yours truly may be a helpful checklist.

Newsletters

You can also check out the burgeoning newsletter space. There are 3 or 4 that cover content related to this industry.


1. Richard Patey’s Website Investing Weekly 

Richard Patey covers the industry very well, does great interviews, and even does due diligence and deal recaps to his paid subscribers, essentially highlighting live deals and saying why he likes them. That alone is very insightful.


2. Alternative Assets

I’ve recently discovered Stefan’s newsletter, and am enjoying it. He doesn’t strictly focus on digital assets, which actually helps keep it more unique in my opinion. 

3. Website Flipping by Mushfiq

Mushfiq makes his newsletter unique by focusing on case studies of several websites he runs, which might not increase your due diligence skills directly, but will enhance your knowledge on growing sites post acquisition, which is still part of due diligence in my opinion.

4. Dealslfow.com – Digital Private Equity

Alex from dealsflow does another great job and is well worth following. He shares domains available for purchase as starter sites, as well as a good roundup of all the latest news.

If you follow the 4 above newsletters, plus watch out for any new ones that come out, you’ll learn a ton about the space in a very short time, and will no doubt improve your due diligence skills.

Paid Solutions?

Need something in a pinch? You could check out the reports and services that Centurica.org provides. While this is them doing the due diligence for you as a paid service, you’ll learn from their reports, plus they may save you if you’re about to buy a lemon. 

The main advantage from a learning perspective is that their reports are pretty in-depth and they explain their rationale.

Courses?

Jaryd Krause has a course over at BuyingOnlineBusinesses.com which definitely covers due diligence. There are a few other people working on courses too, though I’m yet to see any released.

Twitter

There are also a bunch of people discussing deals, growth of sites, and general happenings in the space on Twitter. 

A few accounts worth following (not an exhaustive list): 

Conclusion – Increase your education, exposure to deals, and experience.

At the end of the day, it is going to take a degree of time until you’re good enough at due diligence. However, you can reduce that amount of time by following those already sharing in the space, taking a course, hiring professionals, or simply by immersing yourself as much as possible.

Experience is the fastest way to learn, but it’s also the riskiest, so make sure if you DO just jump in, you do it with an amount of money you’re comfortable with losing, and that you at least understand what the risks are before you start. 

Dom Wells

Dom Wells

Dom Wells is the founder of Onfolio.co. He's been actively building, buying, and selling websites since 2012, and has learned from many a mistake over the years. Through Onfolio, he works with other investors to find, buy, and then operate content sites, without the mistakes.