Define Your Investment Thesis
Are you flipping liquid generics for quick margin, parking for ad revenue, or holding brandables for end-user sales? Each path demands different TLDs, price ceilings and holding periods. Write the thesis down before you buy anything.
Capital Allocation Rule
Never spend more than 10% of total investable cash on a single domain. This prevents a single UDRP or market crash from nuking your portfolio. Diversify across at least 50 names to mimic statistical safety.
Three-Bucket Model
- Liquid Bucket: two-word .com and 3L/4L .com under $500 that can sell wholesale within 30 days.
- Income Bucket: typo domains and high-traffic generics you park for $5-$50/month each.
- Brandable Bucket: made-up pronounceable names listed on marketplaces for end-users at 5-figure asks.
Acquisition Channels
Hand-reg for new trends, closeouts for under $15, expired auctions up to $500, private broker deals for $1k+. Track ROI separately per channel; you’ll discover hand-reg returns 400% on winners but only 4% sell-through, whereas expired auctions return 120% with 25% sell-through.
Tool Stack
Drop-catch accounts at SnapNames and DropCatch, Estibot for quick valuations, NameBio for comps, FreshDrop for expired lists, and a CRM like Notion to log purchase date, price ceiling and outbound status.
Renewal Budgeting
Multiply average renewal by total domains and divide by 12; set aside that amount monthly in a separate high-yield savings account so renewals never compete with rent money.
Sell-Through Rate Math
If you own 100 domains averaging $500 each and sell 3% per year at median $2,500, annual gross is $7,500 against $1,300 renewal cost—net 85% margin. Small improvements in sell-through (better descriptions, outbound email) double profitability.
Exit Strategies
Package related domains and sell as a lot to an industry roll-up. List entire portfolio on Flippa or hire a domain broker for private equity buyers. Clean WHOIS and organized spreadsheets raise valuation multiples.
Risk Management
- Limit trademark-risk names to <5% of portfolio
- Use separate LLC per 500 domains to compartmentalize legal exposure
- Insure high-value names via domain insurance riders
Scaling to 1,000+ Names
Negotiate bulk pricing with registrars (registries offer tiered discounts starting at 1,000 names). Outsource routine tasks: listing copywriting, outbound emails, renewal monitoring. Focus your time on acquisition and high-dollar negotiations.