$10,000 Budget for .CA Investment

[domainatrix]

Not sure if this is the right place to post this, but we landed a new client about 3 weeks ago. This is a new "domain investor", someone who would like to diversify their investment portfolio to include domains. Their goal is to buy about 50 "good" domains at an average cost of $200 per domain. I say "good", because we realize it is impossible to buy 50 "great" domains with $10K.

Anyhow, we started to reach out and contact domain owners, but as soon as you say you are interested in buying, their demands become outrageous as they think you are a desparate buyer: NOT THE CASE! We are going to patiently acquire the 50 domains. $200 will be the average cost, but we will entertain purchases on either side of that price.

If you have domains that you are interested in selling, please send a list with prices to jsm@north.ca.

No offers via PM...

Please don't be offended if we are not interested. We will make recommendations, but we do need final approval from our client. We have already purchased 3 domains and they are "very good".

So let me know if you have anything you are interested in selling (domains without a price will not be considered).

[DomainMagnate]

what's the max budget per name?

[sdsinc]

Any specific niche or type of domain please ?
I understand this is for .ca domains only - English and/or French names ?

[domainatrix]

No specific niche, but definitely english. These domains are for investment and development. The clients goal is a 20% return over 5 years, so they'd like to turn $10K into $25K. If things are looking good in 6-12 months, they may invest more.

As for max budget per name, there is none, but they do want 50 names, so it's unlikely we will throw $1000 at any domains as this would mean getting a few "very good" domains, and a bunch of "mediocre" ones. We are also using the budget on selective TBR names, but the quality has been poor lately, and landing the decent ones via TBR is increasingly difficult.

[$ideline]

Email has been sent with list.

[Namefox]

Email sent with list. Thanks for you consideration. I would consider bulk deals if we can package some domains together.

[loudbeats.com]

email sent

[theinvestor]

Could you please give an example of a good domain for $200...?

[jaydub]

Yes...I would be interested in that as well...Thanks

Originally Posted by theinvestor

Could you please give an example of a good domain for $200...?

[liberator]

Email Sent!

Cheers,

Jay

[domainatrix]

Wow; I really appreciate the quick responses. Over 1000 domains have been sent since yesterday, so we will have to sort through them and make recommendations to our client. In the meantime, please keep them coming to the email address above. Many did not include prices, but simply asked for offers. We will not be making offers on non-priced domains.

A few of you sent domains in the $1000 range and above. Due to the budget limits, we cannot make offers at those levels, or we will have an impossible time buying 50.

As for examples of a good $200 domain, that is going to be determined by the buyer, and would fluctuate based on the market conditions (supply and demand). Three years ago $200K would have bought you a fixer-upper 5 miles from the beach in FLA; today you can get a two-bedroom condo on the beach for the same price.

Don't mean to evade the question, but it's not that easy to answer. For example 18 months ago we might have been buying LLL's as many LLL.ca were selling for $150-$200; now you can get a bunch (5-6) for $200. So if you have LLL.ca, please don't expect us to offer $200 (unless they are brandable).

Some geo's may be a good value at $200, something like TorontoRestaurants.ca or VancouverRestaurants.ca. (sorry if these belong to anyone here!) A few people sent domains that they just registered yesterday (no thanks to those too!). Proper Names could make a good investment, but please no TM.

[hugegrowth]

No offense but if I had $10,000 to spend on .ca domains, I'd probably buy 1 to 10 really good domains, instead of 50 decent ones for $200 range each. But given today's economy you might get some good ones in your price range. I just wonder if they should re-think their strategy.

[domainatrix]

Originally Posted by hugegrowth

No offense but if I had $10,000 to spend on .ca domains, I'd probably buy 1 to 10 really good domains, instead of 50 decent ones for $200 range each. But given today's economy you might get some good ones in your price range. I just wonder if they should re-think their strategy.

It comes down to "investment" strategy, no different really from investing in the stock market. How big do you want your basket to be? Your strategy is definitely one that was considered, but our experience, having done this a few times, is that if you buy 50 good domains, over a 5 year period a couple of those will attract some nice offers, and in many cases it's not the domain you would expect. Last year we helped a client buy 10 "auto" related domains, all between $50-$300. The one you would consider 9th or 10th best he sold a few weeks ago $2000, just about making back his entire initial investment.

The biggest problem buying these day is the unrealistic expectations of the seller. We have made fair offers of $100 or $200 for domains and been turned down, only to then see the domain show up in the TBR list. Odd!!

[hugegrowth]

Interesting but not surprising, value of a domain is different to everyone.

In a sense, if it was the 9th or 10th best name out of ten, those names have a potential worth of $20,000 based on that one sale.

I sometimes wonder about the value of my .ca portfolio, I could easily see each domain selling for $1,000 to the right user. And some have sold for that or more, and not even my best names. Now, if I had for example 100 .ca domains, is my portfolio worth $100,000 potentially? Maybe. And then I know some of those domains are easily worth more than $1,000 each. But we all know it isn't easy to liquidate a portfolio and get good value, so you get that value over time, one or two sales at a go. Not that I want to liquidate my portfolio now - lol.

Back to the strategy, I see what you mean, but it's buying 50 names and hoping to have a few winners in there, vs. buying say 5 domains with the same money and knowing they are all winners. I think the Legendary JP talked about this type of strategy before, meaning its better to buy fewer domains of high quality than spread it around too much on many domains.

Two factors working against the value of the mid-tier names are the relatively small Canadian population, and restrictions on .ca ownership. Population can't do much about, but if anyone could own a .ca you'd see more speculators come in and prices for mid-tier domains would be higher, IMO.

[TheLegendaryJP]

Why stop at $10k, why not $100k and make $1M?

[raoul]

Originally Posted by TheLegendaryJP

Why stop at $10k, why not $100k and make $1M?

I was thiking the same, I have somewhere laying arround 100k for sure....

[domainatrix]

All very good arguments, but as I mentioned earlier, it's like investing in the stock market. Everyone tries to pick a winner, some do it by buying only "blue-chips", while others like to go for the "penny-stocks", and still others leave their money to be invested with a sure winner like "Bernie Madoff". I personally like real-estate and mutual funds. If more traditional investors saw "domains" as a viable part of their asset-mix, this would definitely add value to your holdings. But this is unlikely to ever happen, as domain investors are a fringe group.

In the end, if your strategy is to flip domains, that is, buy for $xxxx and try to sell for 2x a few weeks or a few months later, then LJP's strategy is the way to go. It is however, a bit of a day-traders mentality.

Why limit the investment to $10K; I guess this guy is smart!

[TheLegendaryJP]

My strategy sounds much better when you describe it

[flybuzz]

Yeah 10k budget is really limited. And who is going to sell you good 50 domains that produce 20% return over 5 years? Wouldn't they rather keep the names for 5 years themselves?

[theinvestor]

I've said this many times before..but you don't invest in domains by buying 100 names that are worth $10. You buy only quality names... 1 or 2 and build a strong portfolio.

The only problem i find here is that ...i am not going to submit names if i have no idea what a $200 name is worth to you. Most of the resellers here will not sell much of anything for $200.

Also, the term diversifying is not meant to be used in one stream...you don't diversify in domains by buying 50 names instead of 2. You diversify by buying investments across the board... stocks, commodities, real estate etc.

Good luck in your search though..