Investing In Revenue Producing Websites For Passive Income With Ken Courtright

BWB Ken | Building Passive Income Streams

Investing In Revenue Producing Websites For Passive Income With Ken Courtright

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    Sometimes it's easier to just buy a business than it is to build one, especially if you're looking for passive cash flow.

    In today's episode, I interview Ken Courtright who is the Cofounder of IncomeStore.com which is a company that works with investors to help them buy and sometimes build completely passive income streams from online businesses.

    This isn't the first time I've covered the topic of buying versus building. If you like this show, catch my episode with Ace Chapman as well.

    I originally met Ken at former guest Ryan Moran's Freedom Fast Lane Live event in December and instantly knew I had to get him on the line to discuss a very unique business model he has. In a nutshell, Ken and his company will buy (or build) you a revenue generating website, they'll manage every aspect of it and split the profits with you 50/50. Better yet, they have a “performance guarantee” that ensures you earn a minimum two-digit rate of return on your money no matter what happens. If you are open to hearing about a truly unique passive investment opportunity that is different than almost anything I've personally heard out there, tune in to this episode.

    Some Topics We Discussed Include:

    • The WebMD model
    • The Act of God clause
    • How to make a website income generating
    • The three different types of product in this business
    • The minimum investment to get started
    • The demographics and reasons why people get into the revenue-generating website business
    • Why consider IRAs to raise money for capital

    To learn more about Ken and the advantages of buying income-producing websites either for yourself and managing them or having them do all the work for you, visit https://kencourtright.com/.

    About The Guest: Ken Courtright

    BWB Ken | Building Passive Income StreamsKen Courtright is the founder of Today’s Growth Consultant, a two-time Inc. 5000 designee with revenues that have doubled in each of the last 5 years. Started in 1992, the company is now an international, multimillion-dollar enterprise. TGC has worked with over 3,300 companies in 49 states.

    Ken is the author of the upcoming book Guerrilla Marketing Today, part of the best-selling Guerrilla Marketing series, and best-selling author of Online Income: Navigating the Internet Minefield and co-author with Brian Tracy of Against The Grain. He is currently working on his next book Trust Trumps Everything: Why Your Digital Footprint Determines Your Income.

    Investing In Revenue Producing Websites For Passive Income With Ken Courtright

    I’ve got a fun episode because it is directly relevant to something that I have a lot of curiosity in and that I’ve explored quite a bit both in my personal and business life, as well as some of the people who have been on the show before.

    I’m going to be introducing you to a guy named Ken Courtright. Let me give you the backstory here. I was in Austin at Ryan Moran’s event called Freedom Fast Lane. He was a former guest.

    Ryan had some absolutely world class speakers, some amazing people up there. He goes, “I’m going to bring somebody up. He’s going to talk about buying income producing sites.”

    Having them run in passive investing, etc., I don’t think he really did him justice, but Ken got up and he spoke. I know that I was on the edge of my seat thinking, “I’d like to hear him talk a lot more about this.”

    Everything he was saying, I don’t want to say it’s too good to be true, but it was like there were a lot of good things that Ken was talking about with buying income producing websites and having them in your portfolio.

    Afterwards in the hallway, I saw a whole bunch of people surrounding Ken asking him probably the exact same question a million times. I waited until the end where I approached him and said, “I’d love to have you on my show and explore this even further.” This is the topic we’re going to talk about.

    Ken is the Founder of IncomeStore.com and TodaysGrowthConsultant.com. As I mentioned, the big topic we’re going to be discussing is buying income producing websites either for yourself and managing them or having them do all the work for you.

    There’s a previous episode that I did with Ace Chapman. We talked a lot about buying websites and businesses instead of building them from the ground floor and realizing that we’re in the business of cashflow making money.

    Sometimes it’s crazy to think about building one from the ground floor because so many of them fail as opposed to going out and buying your cashflow from somebody who’s already done the hard work. That being said, I want to welcome you to the show, Ken. It’s great to have you here.

    Thanks for having me.

    I want to keep this a little different than maybe the traditional podcast where I say, “Ken, tell me how you got started. Tell me your backstory. Tell me all of those other stuff that isn’t pertinent to the cool stuff you’re doing right now.”

    I think I’ve set the frame for what we’re going to talk about is what you guys do and buying these sites. Your website, I guess your primary one is IncomeStore.com?

    That’s pretty much the only one left. The other one, we shifted away from that in about 2009. Income Store is the flagship.

    You do an amazing job of explaining. You’ve got so many FAQ videos and what this is all about is that I don’t want to belabor the basics too much for people. I want to dive in if people go, “Crap, I get this.” I want to treat this as my FAQ session.

    This is my opportunity to get to drill down to some of the questions you may get a lot, but that I know are probably on a lot of people’s minds who decide to work with you and pursue this path. Tell us in your words what you’re doing, what the Income Store is all about and your expertise.

    The easiest way to explain what we do is to use the metaphor of real estate. Let’s say I live near Chicago, but I wanted to look into buying property, physical rental property in Indianapolis. I didn’t have time to leave my job or leave my company, but I knew Indianapolis was the hotspot.

    I would end up calling a project manager or a scout in Indianapolis and say, “Here’s my budget. I’ve got $1.5 million. I would like ten units or five units.” They would find me a property. They would help me fix it, get it ready for rental.

    Then they would find me tenants and then they would manage those tenants in those properties. In return, most property managers that work that way, they get a slice of the revenues instead of a fixed monthly fee. We do exactly that.

    People come to us and they say, “Ken, Kerri, I just sold my house. I’ve got an extra $100,000. I heard you guys can either build or buy me a revenue generating website and then you’ll manage it for me and we’ll share the revenue.”

    What we do is somebody will come to us and say, “I’ve got $100,000, what do I do?” If they want just pure, passive cashflow or if they want to generate leads for their business, it all depends on what their needs are.

    We will do what’s called a hybrid and we will buy them a website that is already making money. Then in the next 90 days, we’ll also build one from scratch that is built on the exact same keyword silo of the one that we bought.

    Within twelve weeks, that person who threw us $100,000 now has an asset that’s probably producing in the $20,000 to $50,000 a year range and then we split that right down the middle, 50/50.

    Then we take our 50% of the revenue in perpetuity and continue to buy content, continue to market that content, and continue to put some payroll and profit in our pocket so we can keep that site growing.

    In one sentence, people throw us money and we then buy them or build them a website that makes money. Then our 90 to 95 employees help manage that asset until they determine they want to sell it.

    In exchange for that management, we share 50% in both the ongoing revenue and 50% in the price above which they bought it at, if it sells. If they sell it for $200,000 and they give us $100,000, they get their $100,000 back and then we split the overage of $100,000, 50/50.

    That’s very simple and it runs parallel to one of my closest friend, former client and past interview guest, Kent Clothier. His family and himself is big in the real estate market. Turnkey real estate is their thing. They have a company called Memphis Invest.

    It’s the exact same thing in real estate like you said. Their clients just say, “I want to buy an income producing house.” Their company goes out and buys the house. They buy the house for a good price, renovate it and put tenants in place. They manage it and it’s hands-off.

    Their clients never even see the actual property. They just get money deposited in their checking account and they love it. It sounds like this is a turnkey way for people to put their assets at work and not ever have to worry about being technologically advanced or understand marketing

    You also said something that’s key. This is their asset, not ours. We don’t own any website. We manage other people’s assets. They get on the phone, have monthly update calls with us and tell us what they want done with the site next month, next quarter. They want us to push the marketing harder.

    They’re involved but at the same time, it’s their asset that is absolutely managed and built by us. That’s a good word. It’s a turnkey position for them. It’s very similar to buying a franchise, except they don’t have to work behind the counter.

    Have you been using turnkey in your marketing?

    Never.

    I would use that. It’s a very popular word. I’ve got a big background in real estate and it’s a word that’s always used in real estate. Turnkey means really hands-off.

    I’ve heard it a million times and just never correlated. You might start to see that coming too.

    The kind of sites that you guys either buy or build, are they typically content-based sites that generate money with advertising and basic affiliate link revenue like Amazon or other stuff? You’re not necessarily buying complex sites that are like eCommerce, etc. or are you?

    We pretty much have a little bit of everything. I do have eCommerce. I do have Amazon. I have some very large Facebook platforms. I would say we’re modeled after WebMD, which is the largest medical authority site on the planet.

    Market Watch said it made $570 million from a single website. 90% of that, $500,000,000 in revenue from one website is just passive like Google Ads and banner ads. Not necessarily to be clicked on, but in general for branding purposes for these large pharmaceutical company.

    What the biggest companies in the world, and what even the small businesses are looking for is called TOMA, Top Of the Mind Awareness. The question is, how in today’s digital age do you get on the top of the mind of your potential customers?

    One of the ways you do it is all fashioned guerilla marketing techniques. The biggest companies have figured it out.

    Small mom-and-pops and entrepreneurs have figured out if you can find a potential customer, then you can get in front of them on Facebook with a retargeted campaign, with an information-based website and you stay in front of them.

    Eventually, they’re going to make a decision about your product or your competitor’s product. If you have TOMA from these branded ads, you’re hitting home run. We built a platform knowing our goal was to get to 1,000 websites under management over a billion annual eyeballs.

    If we get to a billion eyeballs across our portfolio and somebody comes to us and says, “I really need to get in front of a 46-year-old female,” then we’re just going to look into our portfolio.

    “Here’s 35 sites that match. Let’s do some branded ads and it will be another additional revenue stream for our website partner.”

    You basically got your own native ad network there.

    Pretty much, yeah.

    Keeping them like that probably keeps it easy to manage when it’s a lot of similar sites. I was talking to a couple of good friends of mine who are not in the world of internet marketing.

    I mentioned this is an interesting business model of what he’s doing, etc. I mentioned content-based sites that generate revenue with banner ads. They go, “Nobody clicks banner ads.”

    They thought because they never click banner ads that nobody does. He realized that Google built his empire on people clicking ads.

    Google does four billion a month with people clicking on it.

    Like you said, it’s not always necessarily because people pay cost compression as well as cost per click. It’s not necessarily just making money when people click. Sometimes it’s having it up there, people will pay just to show you and branding that right?

    Google is an empire built on people clicking ads. Click To Tweet

    Yeah, you can get $1 to $10 per thousand-page views whether somebody clicks on your ad or not.

    Your filters when you go to purchase a website or a business. You’re not buying a website; you’re buying a business as an income producing asset. What are some of your filters? What has to be in place for you to go out and acquire a site?

    It ends up being about a twenty-page document. Some of the highlights were we start with what’s called a Digital Footprint, which happens to be the name of our annual conference. A digital footprint is, let’s look at WebMD again.

    WebMD has been around for years. They’ve made more money every year than the year before. They’ve never once gone backwards. Their digital footprint is every year, we’re going to ask more and more doctors to write something every month.

    They started with three doctors, then fifteen, then 50. Now they’re up to 505. As the world changes, one fourth of every search in the Google search bar is first time. They’ve never seen it before. They have no idea.

    I know that. I just saw that somewhere, that statistic.

    It’s amazing. The fact is now, one out of every four things typed into Google, Google’s never seen it before. They have no idea where to send it. They use something called RankBrain to determine where it goes.

    What we want to do is reverse engineer the website that’s already built. What we want to do is we’re going to look at a site. Let’s say it’s making $3,000 a month. The digital footprint will show us the last one to three years of its life cycle.

    Who built it? How is it built? How many pieces of content? How many pieces of content per week, per month? Was it done by one, three, five authors? Where has the link equity come from that’s holding up this website?

    Does it have what’s called social signals? Does it have what’s called author equity, where the author of the content had some meat on the bone for their personal name? We go through about 100, 120 different data points.

    If we believe that our team of writers can absorb this site into our portfolio, see how it’s built, see what it currently ranks on and continue writing on similar topics in a similar way but do more of it, that’s the determining factor.

    Just to boil it down, can we continue writing what it’s been writing on in a good or better way? Quite frankly, can we write more? If you can double the content, which we just take WebMD in its simplicity, they just keep doubling the content every three years.

    If you double the pace of the content you put in monthly, which is called content pace, Google has no choice.

    Their algorithm is physically built to honor the websites that write quality content, whether content gets picked up and shared socially which can’t be faked. The ones that continue to increase their pace, Google increases the rankings.

    There’s a formula to that. You’re looking for the quality ones. What about longevity of the site, would you consider buying a site that’s just been up for twelve months for instance?

    Definitely. I’ve bought sites that have been up for five weeks. It depends on what we’re seeing. Let’s just take wine. We own Wine.net with a partner.

    If a site comes up and it’s only two months old but I can tell it exactly matches what we already own, I know my writers have already dominated in one site with it, they can then definitely jump on that second one if it’s in a similar vein. I don’t need a lot of backstory or a big digital footprint with that.

    Let’s talk about what kind of multiples are you buying these sites for. Do you have any kind of rules in place?

    We used to only buy at two times earnings. Because we have bought hundreds of sites from the five largest website brokers in the world, we’ve somewhat influenced the market.

    The cost of a good site has gone from an average of about 1.7x earnings when we started to about 2.6x earnings now. It’s just pure supply and demand. What we have done is we’ve rebuilt our relationships with these brokers and we’ll now get sites before they even list.

    We can prove to these sellers that they should work with us at closer to 2x earnings. The reason is we’ll end up keeping the seller on as a co-owner with our half of the revenue for the life of the site. They end up still getting 2.6x earnings roughly.

    In essence, you’ll buy half of the company?

    No, we’ll buy the whole thing out, but we’ll then cut them in on revenues for say up to five to ten years with a tiny piece of the revenue because we want to consult with them.

    They built it. It’s their baby and we just want to keep that ingenuity and that vision. It’s worked really well for us.

    In a case like that, let’s say I’ve got a site you can buy for $100,000. Will it be part cash and part deal?

    BWB Ken | Building Passive Income Streams

    Building Passive Income Streams: Buying income generating websites is a turnkey way for people to put their assets at work and not ever worry about not being tech-savvy or a marketing expert.

     

    No, I’m going to wire you $100,000 the next day.

    Then you’re going to potentially keep a portion where I can still get returns from this as well?

    Yes, correct. Let’s say you were listing it for $115,000. Nobody’s going to give you $115,000 but they’re going to give you $100,000.

    I’d give you $100,000if it’s a quality site. I’d also probably give you maybe a couple of hundred bucks a month for the next five, ten years.

    That sweetens the pot. A lot of other people are probably not going to do that because they would probably come in and say, “I’ll give you $80,000, then I’ll pay you out the rest over time.”

    That’s exactly how it’s going to go. The typical site sells with a half down and the other half on a six-month earn out if the numbers hold. The numbers seldom hold. There’s a reason they’re selling it.

    When I sold my first business, I had to fight tooth and nail. I luckily got all the cash upfront when they wanted it. They started off on part cash, part owner finance. I wanted out so it was a battle. I would have loved to have gotten that deal where I got all my cash plus some.

    Let’s talk about income expectations. You mentioned the word guarantee on stage. Typically, I give you $100,000.

    I know number one, you said it typically takes about twelve weeks or so to start for me earning income, but what kind of income can I expect depending on where you’re buying this? Is there a range?

    Yes and no. The reality is revenue generating websites are revenue generating websites. Very similar to a rental property, unless you take a rental property in Manhattan versus a rental property in Cleveland, Ohio for the same square foot, the rents are going to be higher in Manhattan.

    Same with websites. Certain sites in certain industries, take wine. If the site has more traffic, it’s going to have probably more revenue. The higher traffic sites are like buying Manhattan, the lower traffic sites are buying Cleveland.

    The cost is completely dictated, hardline by the revenue at roughly 2x earnings. Just a rule of thumb, if somebody gives us $100,000, I’m going to buy an asset for them at 2x earnings. To say it differently, I’m going to buy them an asset producing a 50% return.

    We’re going to split it down the middle. The person that funded it has an asset that’s receiving about 25% a year on their money. Then my company gets 25% a year on their money, on their asset. I have to take my 25% and chop it into thirds.

    One third is going to buy a tremendous amount of content. One third is going to then market that content and get the world to see it. The other third hopefully goes to payroll and profit. If you use that formula, in almost 97% of all industries, that is enough money to grow this site on a fairly steady basis.

    You mentioned the guarantee piece. What we did is we realized a few years ago that some of these sites are seasonal. We didn’t put the guarantee in to necessarily benefit the website partner per se.

    We did it for ourselves because the guarantee allowed us to say, “If we’re going to guarantee on a $100,000 deal, we’re probably going to do a consulting performance agreement like a property management agreement.” That will guarantee say 12% to maybe 15% or even 18% on that $100,000.

    However, I’m going to chop that up into monthlies so I’m only passing out $1,000 to $1,500 a month. That way, if the site is seasonal, I don’t get pinched. In the old days, seasonal sites would crimp us during the slow spots which are typically Black Friday to January 23rd.

    The January, February payouts for some reason, we just were getting hit in the gut there. What we ended up doing is we instituted this guarantee which is called the Act of God clause.

    It says if something happens to this website for any reason including an Act of God and this revenue drops four months in a row below the minimum, we have 31 days to build you or buy you a new one to get that minimum met. We have to do that out of our own personal operating capital.

    We’ve only had to do that four times out of 800 plus sites. However, we’ve had to think about it eleven times. Seven of those sites, we looked at it, analyzed it and it got close to four months in a row. We were either able to bring it back quickly or it just never hit that four-month in a row.

    In four occasions, it did. On two occasions, we went out and bought completely new sites. In the other two occasions, we just built a couple of small ones because it was only missing by a couple of hundred bucks a month.

    That person happens to have two sites and they’re well above their minimum. The bottom line is the guarantee is saying that our company is going to stand by our management of that website. If something tragic including a Google algorithm update like in 2013, we almost got just molt.

    It would turn every six weeks. It was this, that, the other. It took us eighteen months just grinding it out. We’ve got almost every one of them humming again. Some of the ones we thought we were going to lose turned out to be some of our best sites ever.

    Back to that minimum. You said that if it falls below the minimum for four months in a row, that’s when you have to say, “We got to make this good.” Is that the minimum income for the partner?

    I’ve done minimums based on the contract. It’s based on what their goals are. If their goals are, “I would like some passive revenue,” or “I need leads for my business. I need this. I need reputation prevention, reputation management. I need all of these different things.”

    Growing a website to appeal to the Google search bar is completely different from growing a website using social media. Click To Tweet

    I’ve done guarantees in a contract which goes in perpetuity from as low as 11%. I’ve even done one as high as I think 23%, 24%. It’s all different. Like you said earlier, every website is a business.

    I’ll give you a couple of great examples. One gentleman I’m referring to was in the audience at Ryan’s event. His name is Denesh. Denesh and his brother called us. His brother is out in Dubai. I think they sold a piece of property or something.

    They threw us $180,000. We ended up buying a site. His guarantee is something like $2,200 to $3,200 a month or something like that. It involved two different websites.

    That site went from $3,000 to $5,000 to $9,000 to $15,000 to $18,000 to $20,000 to $22,000. I heard it came in at $23,800. He’s now getting $12,000 a month. We’re getting $12,000 a month. His minimum is only $2,000 or $3,000. He’s getting 400% above his minimum.

    That contract is paying 70%, 80% a year on the contract. If he sells it, he puts in $180,000, he could easily get some. You can sell these, believe it or not, for 3x to 10x earnings because they’re now an authority site and not a regular generating site.

    Conceptually, that was one. We have a much better story. A gal in Costa Rica sold their business. They wired us a couple of hundred thousand. We ended up buying a site that did surveys for some very specific niche business or something.

    We put both our Google team and our Facebook team on this site immediately because it was a substantial site. The guarantee is $5,800. It went from $6,000 to $10,000 to $15,000 to $20,000 to $30,000 to $40,000 and it did $57,000.

    What do you think was the reason? Was there any specific reason?

    I know exactly the reason. What we learned, we did what’s called a focus six. We took six sites and we put both our Google team and our Facebook team.

    I say that because growing a site to appeal to the Google search bar is completely different than growing a website where you’re using social. The mindset has to be different. The budgets are different. The timing is different. Everything is long-term on the Google site, short-term on the Facebook site.

    What we did unbeknownst to us is we took six sites and we wrote marketing plans that happen to involve both the Google team and the Facebook team.

    Those six websites, if you combine them, they combined net earnings worth $12,200 a month. They did $126,000. What we found is when you attack a website on the search engine optimization angle for one month and then you look at what grew, you go right to the low hanging fruit.

    The stuff that’s at the top of the page two in search and you attack it from every social angle you can, you literally annihilate that site with traffic from all these sources.

    We notice Google has something called FOMO, Fear Of Missing Out. Google says, “What’s all this traffic going to what’s now on page two?” Most people don’t go to page two of Google.

    Then they go, “We must have missed something here,” and they move those phrases from page two in search to the bottom or middle of page one.

    Because you had so many signals coming from social, this must be something important.

    They go, “We must have missed it. Let’s move it to page one to get in alignment with what the world’s looking for.” Then they just change the digital footprint of our site. Now we scan it again and there’s new stuff completely on the top of page two.

    We hit it from SEO again for a month. We run the scan again and then we just attack with social. With those six sites, we hit them from the north side with search, hit them from the right side with social and just go nuts.

    You guys have the ability to supercharge sites, especially when things are doing well. It’s easy to talk about all the best case scenarios. Have there been any horror stories?

    Yes. I wrote in my whole first book, Online Income, Navigating The Internet Minefield, the story of our first 200 sites. It’s comical. I have some better stories since that book. We had one site and it was in the industry of you would look things up for verification.

    We bought it and in a marketing meeting, one of the guys on our marketing team misunderstood my directions. He thought I said, “Use our corporate debit card for pay per click in a direct proportion to growth.” That’s what he thought I said. It’s not what I said.

    As the site was making $5,000 a month when we bought it, he did a pay per click campaign and got the net earnings to $8,000. That grew $3,000. Three is 60% of five. He increased the pay per click budget 60%.

    The site went to $18,000 a month. He then doubled the budget again. It ended up going to $40,000 a month in net earnings. One of the competitors of that site saw the growth was so rapid they purchased 400 pornographic links from Japan and Russia.

    In 72 hours, they nuked us and they annihilated the link pattern with crap links, black cat links. Google shut us down and they took us out of search.

    We got a hold of Google because we have a relationship with them. They’re like, “We are so sorry. We see that this is not real and we even know who did it. However, our algorithm is mechanical. You’re going to have to go in one by one and detox every single link manually. There’s no way to do that.”

    BWB Ken | Building Passive Income Streams

    Building Passive Income Streams: When you attack a page two web site on a search engine optimization angle for a month from every social angle, Google notices it.

     

    We’ve had a couple few of those. That was the one where we threw it away and start over. There’s so much crazy stuff. Luckily, our motto is time is the train. We want to grow slow and steady every quarter. We do not want hyper aggressive growth. We’ll take it.

    It’s not what you’re searching for.

    It’s not the plan. We have an annual event Inc. and Forbes recognized can’t miss, must attend event annually. We go and we teach how do we build and how do we buy revenue generating sites. We do it for this sole intent and purpose.

    If we can teach the world how to do this, they’ll end up making more money. When they get a sizeable amount of money, they’ll get tired of doing the work. They’ll just write us a check and let us do it. That’s our MO. It works well, but we definitely share some very comical stories.

    The downside potentially if something like that would happen now, a partner gives you money and a site gets nuked for one reason or another, that’s your Act of God clause right?

    Yup, totally.

    The worst that can happen to them is while you’re building them a new site or buying a new one, I’m assuming you’ll do that with your money. Will they continue to get their minimum paid?

    Of course. The gentleman that this happened to didn’t even know this happened. His $3,800 or whatever his minimum kept coming in. We told him six months later.

    That’s the part where the guarantee is probably one of the most convincing things I would imagine that allow a lot of people to work with you. It’s probably also one of the biggest red flags, “That sounds too good to be true.”

    As I’m understanding it, your insurance policy is the fact that you got so many sites, you’re so good at this. You don’t try to step on the gas too much.

    You’ve done this a lot so that if one site or a handful of sites start to lose traction, you’re profiting from enough of the others you use your company bankroll to bring that up and make things right.

    These stories I’m doing were a couple of few years ago prior to the Panda 4.0. We have no juicy stories in the last couple few years. The world of the web has calmed down tremendously. Not that this is never going to happen again. Anything could happen.

    The reality is we’re not too big to fail. We’re not an N-line situation. If there was a challenge, we do have the ability to make some quick ads, put them on a bunch of other sites, expose that website in front of a very large mass of people and probably lift that up if we had to. We have never had to do that.

    It is definitely a comfort. Just to show you how sensitive we are to the too good to be true piece, which is our number one most common thing, our spokesperson nationally is still on our website now, Professor Hans Von Puppet.

    The very first thing out of his mouth both on the national TV and radio commercial and the video is, “Do you want to hear something that’s absolutely too good to be true?” Then he goes through it for a minute. At the end he says, “It sounds too good to be true but it’s true.”

    We definitely don’t take light that people are giving up their hard earned money to put an asset in our hands to manage.

    Especially where something like with real estate, people understand real estate. Everybody’s either lived in a house or an apartment or bought one in their life so they get it.

    With digital properties like this, there are a lot of folks who are not as astute. They’re like, “I don’t understand this.” I imagine sometimes dealing with that, just getting people up to speed on what this is especially if they’re not digitally savvy, I guess you can say.

    We know in the las years, we played with that. Meaning the last year especially was our slowest year in new site starts. However, it was our biggest year. We’re an eight-figure company.

    We grew substantially this year. We’re a three-time Inc. 5000 company, which for a mature company, those all came in the last four years. Usually a company that hits the Inc. 5000 uses their first year tax return. We used our seventeenth year.

    We were pretty much referral driven. We don’t do much of anything outside of our annual events, getting people together and people asking questions. We don’t even do a commercial at our events for what we do.

    Because the people know real estate but they don’t know what we do, since we’re at 860 sites with the goal of a thousand, we have slowed down the new site partner acquisition because 71% of our site partners do another one in under a year.

    You don’t have to go out and bring a lot of new business. This might be in the contract, can a site owner or partner fire you?

    They can’t fire us, but they can sell their site at any time and cancel the contract. We have first right of refusal. They can’t sell it to their brother for $10.

    You have on your website on Income Store how it works on your product line. You talk about three different types of products.

    The greatest industry we could tell our kids to get into is information. Click To Tweet

    There’s the totally hands off, the combo hands off, hands on, and then there’s what you call the hybrid triple, which you mentioned in the video. This is what you’re the most excited about.

    If you care to talk about the differences in the products, the popularity of them. What’s appropriate for the right people?

    There’s no wonder product. The products were built because people now have completely different needs. You take someone that’s comfortable in life. They might even want to do something for their wife or their daughter.

    They may just want to go to the first one which is just, “Let’s buy a revenue generating site and grow it steadily.” People now, it’s different than even a couple of years ago. They want more from us. They want leads.

    They’re very in tune to reputation management, reputation prevention, credibility in the marketplace. The hybrid triple is simply in English, we build a site based on their passion. If somebody is passionate about sports or skin care, it does not matter the industry we go in.

    We’re going to build something that’s called an authority site modeled exactly after WebMD. Our team of writers is going to write every piece of content. They’re going to give us some input monthly on a regular basis and steer the ship a little bit, but we’re going to do the physical writing.

    In the first twelve weeks, we’re going to get a quick assessment to what we built from Google and social, then we’re going to go out to a company.

    We’re going to say, “Build us a revenue generating website on the exact same key words this site stands on, but we want you to do it through the eyes of one, two, or three affiliate products.”

    We want the site making money physically in a couple of weeks. We want it moving multiple products or generating leads. Then we do exactly the same thing again eight to ten weeks later.

    Now, we have three different websites all in the same keyword vein, trying to dominate the same space, but all built by different companies.

    We end up buying those other two from those other companies and then we cross market the three of them together. The only way to best explain it, if somebody wants deeper info is, study the Nasdaq Company interactive Corp. IACI.

    You’ll find that Barry Diller from Paramount Pictures raised a billion dollars, went out and bought Match.com, Expedia, CollegeHumor and four other household name websites and then he ran out of money.

    The only thing he could do was cross market those seven sites together. He began that years ago. If you look at the stock on Nasdaq, it’s one of the fastest growing stocks in the last years and he had no money to do it.

    We are doing that with the hybrid triple. We’re taking three sites in the same exact vein, same demographic audience. They’re built by three different companies.

    Why do you do the three different companies? Is that just to vary it up so that it’s not like templates?

    It has nothing to do with the look. It’s, “I want different vision down the throat of each site.” Like Einstein says, “The brain that got you into the jam cannot get you out of the jam.”

    When you take three different companies but you give them the keywords you want to dominate, these companies are incredibly filled with high creative people. We have never given a company a keyword silo and seen them come back with anything similar to something else.

    What you want to do is you want to then cross market that group of sites and mention the one site with another site.

    You don’t do it linking them together. You do that with very specifically written content like review content. You just keep people on their toes. Then all of a sudden you just have this mass audience down three different sites and everybody’s happy.

    In that case, you’re not going out and buying one like the hybrid triple. You’re not buying one that already exists necessarily. You’re building that from scratch but then you’re buying them from the people.

    Exactly. We’re funding them upfront, a little bit of seed money saying, “Build something.” Then in twelve weeks, I’m physically buying it.

    You’re probably getting a great deal.

    To a degree, yes and no. I’m cutting in that guy that’s built it at a very high level on a portion of our half of the revenue for years.

    It’s still more than two times earnings. I don’t want a short-term because I want to do it with them for years to come. If they win, we win.

    That’s your hybrid triple, then the other ones is just to go out and buy a site that’s doing decent. I think I saw this, but what is the minimum somebody needs to have to invest with you?

    BWB Ken | Building Passive Income Streams

    Building Passive Income Streams: When people realize that they have to make up for lost time quickly, they invest in revenue-producing websites in no time.

     

    We do property deal jackets between $50,000 and $5 million each. If people put in more than a $150,000, we’ll always entertain a multi-unit portfolio so they’ll get maybe two sites or three. If they do $300,000 or more, it’s always three sites or sometimes even up to five.

    If somebody puts in $50,000 to $100,000, they typically get one site.

    Probably. It’s going to expand on their goals depending on how fast they need revenue or leads or reputation fix. With only one domain, with $100,000 or less, you get more muscle down that domain.

    What do you call your site partners?

    They’re website partners. The fact is because they’re their assets and we’re not like a mutual fund company or anything like that. I can’t talk averages or anything about another person’s asset.

    I don’t want to talk about that. I was more going for the demographics. First, you call them site partners. What’s the average demographic or psychographic of your site partner?

    We’ve got everything from single females in their late twenties, believe it or not, all the way to people in their early 80s.

    If I had to say the avatar is, and it sounds so loose and so general, but it’s anybody that has just come to the realization they either have to make up for lost time quickly or they want to have a freaking boatload of fun generating revenue in the coolest way possible. Many people do this because it’s cool.

    How many of your site partners have an advanced knowledge of digital marketing?

    Less than 1%.

    Somebody like myself, I do have an advanced knowledge of digital marketing. I do a lot of this stuff. I also see the value in the stuff that you guys do because number one, my advance knowledge is not in SEO and all of this other stuff that you’re doing, like the content-based sites.

    Mine is much more direct response, sales and paid traffic to an offer. Those are my expertise. I see the value in saying, “There’s a time and a place for having much more passive, dependable assets that can grow with time, that you don’t need a whole lot of hands on, etc.”

    What we do with the people that want to be hands on, we get a lot of very similar questions. I decided instead of answering these questions or coming out with a FAQ, I launched a podcast.

    It’s called Today’s Growth, Growing Business Today. 80% of what is in those 150 episodes are the answers to the questions I get from our site partners.

    Do you get many people or have you looked into this using self-directed IRAs to fund these?

    One third of what we do come from self-directed IRAs.

    Do you do much education to your partners about that? A lot of people don’t even know that they had that option.

    We do not do a good job at that, no. We don’t mention it much. I think five of the seven largest self-directed IRA companies are using us now: SunTrust, Sunwest Trust, Horizon Equity Trust. We’ve done deals with all of them.

    We’re approved by those guys. It’s not even on our website. We probably should put some kind of a blanket that says, “You can use that.”

    If you’re interested, I think this is potentially a cool introduction for you. I’ve got a friend named Greg Herlean and the website is GregHerlean.com.

    You can check him out. Self-directed IRAs are the place that he banked his flag. He’s one of the leading experts out there. One of the things he does is he works a lot in the real estate market, but also beyond that.

    For my audience, if you’re not familiar with what a self-directed IRA is, it means that a traditional IRA is you can buy stocks and bonds and anything you could typically buy from a stock broker.

    However, if you want to put real estate, gold, business assets, partnerships, etc. into your IRA, you can’t go to Charles Schwab or Fidelity or Merrill Lynch and do that. One of the main reasons is they can’t make any money because it’s not regulated by the SCC if they do that.

    However, there are companies that you can use. For instance, I use a company called KingdomTrust.com. They’re out in Kentucky. I use them.

    They hold my IRA assets in which case I typically put that in private real estate loans to other rehabbers and people so I can make a good return on my money there.

    A self-directed IRA is just your ability to invest in alternative assets including businesses without going through the typical channels.

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    Greg, one of the things that he does is he helps people understand that you can use self-directed IRAs for so many things. That’s educating the populous on the potential.

    He also works with business owners showing them that if you want to raise money out there, there are a lot of different ways to raise money. There’s so much money sitting idly in IRAs. A lot of times and cash and people just don’t know.

    He shows business owners how to go out and tap into that huge amount of cash that’s sitting idly on the sidelines looking for something but they’re scared to death of the stock market.

    Is there a particular nut that you’re trying to crack in your business right now? Is there a strategy you’re trying to figure out, a resource you’re trying to find, a person you’re trying to hire or fire or a connection you’re trying to make?

    I’ll just do a blanket statement. We are always looking for great talent. We’re up to 90 plus people. We’re in multiple countries where our employees sit.

    Anybody that has a good knowledge of Amazon, Facebook, eCommerce, web design, anything to do with internet marketing, I would definitely send us a resume. I think we hired 24 people full-time. We’re definitely growing. We need another 10 to 12 key people.

    That’s probably the nut I’m trying to crack is Jim Callaghan’s good to great. You cannot get great people on your bus fast enough. Over time, you’ll eventually put them in the right seat. We hire talent first, position second.

    This talent can be virtual, correct?

    Definitely. You can work from anywhere.

    This has been cool. I’m glad that we got a chance to do this because I got it at a very high level of what you do. Not in a high level but at a very detailed level.

    Like a lot of people, I wanted to dig a little bit more and say, “It sounds extremely legit. Let’s find out.” I’m definitely convinced that it is. I think you’ve got a cool business model as well.

    Another question I had, have you ever even looked into equity crowdfunding as a model for your business? Do you know much about that or have you looked at it?

    We’ve looked at Reggae Reggie crowdsourcing. The reason we don’t is simple. I would much rather own 50% rev share of a thousand sites than 100% of a hundred. What we’re going for is mass. We’re going for a body of sites. I’m not going for revenue.

    If I was going for revenue and fun, I would do a hundred sites myself. I’m trying to help hundreds of people solidify their personal finances, have something truly they can give to their kids. Making money today is a nightmare. Keeping money is a much bigger challenge than making money.

    I think our country does a crap job. They do worse than a crap job of educating our kids on what the difference is between earning interest and spending interest. Truly, we have a site called WealthMaverick and we built a tool inside it.

    This is already with Sharon Lechter in the White House. There is a tool inside of WealthMaverick. I think you click on life calculator.

    We created this killer app which is the story of two twin brothers at eighteen years old. We got with US Bank or Chase Bank in 2012 and said, “What does the average male adult spend money on between 18 and 72?”

    They gave us their books and they said “He buys a used car here at this percent, a new car here at this percent, sometimes a boat, a house. We have everything the average person buys and the interest rate.” We did a story of one brother, he spends interest according to the average US American.

    The other brother’s a little weird. He lives like my family. We have the last name Courtright. There’s never been a male Courtright who have a W2 job in 150 years. Everybody owns a business.

    We were drilled, “You pay your house off in four years. You run privately owned companies debt free,” and that’s what we are. We were freaks of nature growing up with parents that said, “Credit cards are evil. No debt.” We’re not normal.

    The guy in is a member of our family. What he does is he finds out how much his brother is spending in interest, then he saves it. Then we give these kids, because this is built for kids, a dial.

    They can change the interest they’re going to earn in the same dollar amount as what their brother is spending on the left. They can earn 2% or 6% or 10%.

    When you go to the bottom and you look at the results, when you change it from say 2% to 6% and you go to the bottom of the page, you’re going to quickly realize the difference of 2% compounded versus even 4%, 6%, or 8%. It is extraordinary.

    That’s a fun tool that we’re trying to get Sharon Lechter. She’s in the White House. She’s pushing a bill to get financial literacy as a general ed, not optional, subject.

    I do have a father who is a financial adviser and taught me a lot of this stuff so I take for granted what I know versus what a lot of the people that I grew up with that had no clue.

    BWB Ken | Building Passive Income Streams

    Building Passive Income Streams: Brands such as Ford, Nissan, and Sony have taken 25% – 35% of what they used to spend on TV, radio, and print advertising to online.

     

    A little home economics class that mixes in budgeting and how to balance a checkbook with how to bake a cake is not enough education.

    We are in the business of getting people legitimately free from the bondage of debt and finances. It sounds so cliché, but the reality is who out there is helping? There’s a lot of great people out there. There are a lot of things you can do to make some part-time income.

    We took a look and took a step back after years of general growth consulting and 3,100 regular clients. There was no residual benefit. We were just making money. Then we stepped back and said, “What could we do that is definitely a money maker but forces people to build equity in something?”

    It’s a pretty well thought out, many times tried over. I don’t know if that came out right, but we take this from so many angles. We’re still making a lot of mistakes, but it’s finally starting to work.

    Ken, thank you so much for your time here on the show. Going over a lot of this stuff, I know it’s probably very enlightening to a lot of the people who are reading this.

    I encourage everybody, if you want more information, Ken has got a ton of videos and information on IncomeStore.com. He goes into explaining it, if he hasn’t done a good enough job now.

    If this is the least bit interesting to you and you want to follow up with Ken and look at this, take a look, do you have an IRA right now? Do you have the money that’s potentially in the stock market or somewhere else?

    There are ways that you can get a self-directed IRA. I personally use KingdomTrust.com. I’m not compensated for mentioning them. You can explore ways to diversify your assets.

    One of the things I like about this is that I’m very pessimistic about the overall stock market and economy. It’s been years since the massive recession. Things are highly overpriced in the stock market. I don’t have any of my assets in the stock market.

    I like that this is somewhat insulated or completely uncorrelated to what’s going on in the general market.

    Typically, because people are still going to be googling websites and information, going there and seeing ads, and clicking ads and what not, this seems to be a good alternative asset to insulate yourself against market risk, would you agree?

    Yeah. Since 2012, Ford, Nissan, Sony and one other company have taken 25% to 35% of what used to be radio, TV and newspaper advertising budgets. These are in the billions and it’s now only online.

    What they’re realizing is in the traditional television world, you cannot track the dollar from a TV commercial to a sale. On the internet, they can track a funny video that drops a seed, but then they do a retargeting campaign.

    There are companies now that are earning over a billion dollars of revenue a year just tracking pixels for people that start on mobile and then buy on a desktop. The reality is the world is craving information.

    The most expensive product ever sold is information. The greatest industry we could tell our kids to go into is information. Everything revolves and goes up and down on information.

    It’s either the movement of the information, the creation of information, the storage of the information, everything flies with information. It’s not going anywhere. It will always be here.

    If Google cracks out, somebody’s going to step up and be the next Google. People need info to live and that’s the world we’re playing at.

    Ken, this has been fantastic. I look forward to staying in touch with you, finding more about it and encourage everybody to go checkout IncomeStore.com to checkout the podcast. What’s the name of the podcast again?

    The two main tools we have is Today’s Growth, Growing Business Today. That’s the podcast. That’s the business-related growth nugget podcast. It’s all centered around my next book, which I don’t even have a title for but it’s nineteen growth techniques nobody’s ever heard of.

    The other asset we use big time to teach people is the digital footprint event, which can be found at DigitalFootprint.net.

    Thank you so much for reading. I do my best to bring you the, as the title says, sizzling hot business advice guaranteed to make you fat profits.

    It’s my pleasure to interview people like Ken. If you have any questions for me for the show, if you have any recommendations, you can always send me an email to AskBrad@baconwrappedbusiness.com.  

    That is a personal email. I will reply and you’ll get a lot of other goodies as well. That being said, Ken, thanks a lot for joining me on the show. For everybody else, I will see you on the next episode.

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    About The Guest: Ken Courtright

    BWB Ken | Building Passive Income StreamsKen Courtright is the founder of Today’s Growth Consultant, a two-time Inc. 5000 designee with revenues that have doubled in each of the last 5 years. Started in 1992, the company is now an international, multimillion-dollar enterprise. TGC has worked with over 3,300 companies in 49 states.

    Ken is the author of the upcoming book Guerrilla Marketing Today, part of the best-selling Guerrilla Marketing series, and best-selling author of Online Income: Navigating the Internet Minefield and co-author with Brian Tracy of Against The Grain. He is currently working on his next book Trust Trumps Everything: Why Your Digital Footprint Determines Your Income.

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