So I’m Thinking of Investing $200,000…

July 24, 2014 Posted by Tyler Cruz
Paid Advertisement

Another 3 weeks without a post. What happened?

As per usual, I’ve been here all along. I didn’t go on vacation, there wasn’t an emergency, and everything has been going along as per usual.

After tending to my e-mails and morning maintenance of my campaigns, I’ve been spending the rest of my work time looking into getting into the investment real estate business – specifically buy-and-hold rental properties.

I’ve made my living for the past 10 years entirely from the Internet by working for myself, and have done moderately well as a result. So why the sudden urge to jump into a completely different industry?

Relative Stability

Simply put, affiliate marketing is incredibly unstable. I can literally go from making $30,000 profit one month to $0 the next. In addition to such variance, being an affiliate marketer requires time and effort (and luck) in order to make money. You have to keep finding new profitable campaigns to run.

While real estate investment is far from passive income in the beginning, the more experienced you are in it, the more passive it will eventually become. Plus, once the properties are paid off, then you will basically get a guaranteed return for the rest of your life.

This simple fact is the main driving force for me. Good luck finding a guaranteed lifetime (literally lifetime) return on your investment online.

Now, I understand of course that the real estate market can and does change, and you can get bad tenants and all that, but compared to online, real estate is laughingly stable.

Keep in mind too, that I’m in Canada, and our real estate market is a lot more stable than the US due to having a lot more stringent lending rules. 

Lastly, it’s always good to diversify things a bit. After all, I’ve only been doing affiliate marketing as my primary income for a couple years now.

A Whole New World

My only experience with real estate has been through the purchase of a condo in which I lived for around 7 years, the sale of it, and then the purchase of a house.

While I’m very comfortable with real estate for personal use now, it’s a whole different ballgame as an investor. Lending rules change slightly, there are legalities, tax things, and of course tenants.

Now, I want to say that if I do go through with this, that I’ll 100% be using a property management company to handle all of the tenant stuff. They take 10% of the rental cost as their fee and handle pretty much everything that you as a landlord would have had to do yourself including finding, screening, and processing tenants and even providing 24/7 phone support for things like needing to call a plumber in the middle of the night.

Even with a property management company to take on most of the responsibilities of being a landlord though, there’s still a lot of work and stress involved. My hope though is that I can take care of most of this work beforehand during the actual finding and purchasing process.

A Lot to Learn

I joined an online real estate investment community called BiggerPockets which I highly recommend. It contains a blog run by multiple people, a forum, some tools, and a podcast and is a really great resource.

I’ve already learned a fair bit so far, including a lot of the basics such as the 50% rule, the 1-2% rule, and cap rates.

In addition, I went and scoured Amazon for the best related books and added 13 to my cart:

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Total cost: $192.69.

I have yet to actually order them though as I’m a bit worried that the majority of the content may be US-specific and not apply to me as a Canadian. I understand that a lot of the underlying logic could be useful, but I do know that a lot of these types of books are pretty country-specific.

Also, I’m not quite sure if I’d actually read them or not so I’m holding off on ordering them for now. They’re in my cart ready to go though for when I am.

Lastly, I’ve reached out to a number of real estate professionals locally to inquire about things further.

Still on the Fence

I am waiting to hear back from my accountant’s firm as we are going to discuss real estate investments versus other investment options available; I’m simply waiting for them to finish my corporate year-end so that I can book some time afterwards to discuss things.

This will play a very large factor in my ultimate decision on whether to proceed or not.

My Plan

I am not interested in flipping houses.

My plan is to purchase buy-and-hold rental properties, with the idea of parlaying some of my affiliate marketing profits into more slow-and-steady long term offline investments.

I have not quite decided if I want to go the route of apartments or duplex’s, triplexes (multifamily) – there are so many pros and cons to both.

I have also not fully decided on if I’ll buy a place outright or if I’ll get a mortgage (or 4). That will depend purely on the numbers. However, I do not plan to leverage my properties in order to purchase more. I want to be more conservative (at least in the beginning) and pay off the property(ies) before I add more to the collection.

The Local Climate

Now, what may surprise a lot of you is that my local city (I would only purchase within my city or nearby as I’ve lived here for close to 25 years and know it well) isn’t the best place for a real estate investor.

Cap rates seem to be around the 5.5% range, and it’s very difficult to find a 1% deal here let alone 2%.

On the plus side, property taxes here aren’t as high as in some of the places in the US where property is dirt cheap, and my city doesn’t have a lot of slums. There are some crappy areas, for sure, but generally the city is fairly stable when it comes to housing.

For those curious, here are a few investment properties in my city (actual ones I’m interested in):

Four-plex (technically duplex with 4 doors) 

  • Price: $509,900
  • Yearly Net Profit: $30,389 (5.9% cap)
  • Recently renovated
  • Somewhat sketchy area of town

6-plex 

  • Price: $689,900
  • Yearly Net Profit: $38,000 (5.5% cap)
  • An actual apartment building
  • The low net:gross ratio makes me think that it’s very well maintained
  • Extremely sketchy street, but downtown…

Cheap Duplex 

  • Price: $259,900
  • Yearly Gross Income: $20,400 (Assuming 75% net, that’s 5.8% cap)
  • Drove past it a couple days ago, looks a bit run down…
  • A bit worried about the basement

More Expensive Duplex 

  • Price: $429,900
  • Yearly Gross Income: $45,000 (Assuming 75% net, that’s 7.8% cap)
  • Very sceptical about the stated income…
  • Looks to be in decent-good condition
  • On a street with a bunch of duplexes

Mediterranean & Baltic (Cheap Apartments) 

  • Price: $64,900
  • Yearly Gross Income: $7,800 (Assuming 75% net, that’s 9.0% cap)
  • Old building (No idea as to its condition)
  • A little sceptical of the stated rent
  • A bunch of these units are for sale. Could buy a few outright…

More Expensive Apartment 

  • Price: $134,000
  • Yearly Gross Income: $10,800 (Assuming 75% net, that’s 6.0% cap)
  • Penthouse
  • Nice apartment in good shape
  • I actually really like the look of this one, just saw it now, heh

Feedback is Welcome!

So, what do you think?

If I do go ahead with this, I’ve already played around with the idea of adapting my blog to incorporate my real estate investments as well. I can see me doing posts of "before and after" photos of my rentals after some basic upgrades, for example Smile

I KNOW that a lot of you will have strong opinions on this one. Real estate is just one of those things that everyone likes to chime in on Smile with tongue out

I’d especially be interested to hear from other affiliate marketers who have invested in real estate.

Posted: July 24th, 2014 under Miscellaneous 9 Comments

Affiliate Marketing Income Report: April 2014

July 1, 2014 Posted by Tyler Cruz
Paid Advertisement

April’s Report! Only one more report to go and then I’m finally up-to-date!

Unfortunately, that’s the only good news you’ll see in this report, as April ended up averaging only $11 net profit a day!

Ah, the highs and lows of affiliate marketing. When things are good, things are really good. When things are bad, things are really bad. The swings are almost as bad as in poker, only it’s a lot harder to go into the negative territory in affiliate marketing as you have a lot more control over what happens.

In fact, that’s why you have yet to see me finish a month in the red.

With that said, let’s get this over with… Winking smile

April 2014 Affiliate Campaign Income:

$3,486.55

Ha! April 2014 was by far the lowest grossing month I’ve done ever since starting these reports in January 2013.

Affiliate Network Breakdown:

  • Affiliate Network #1: $3,161.55
  • Affiliate Network #2: $66.00
  • Affiliate Network #3: $259.00

Expenses:

$3,150.00

Traffic Source Breakdown:

  • Traffic Source #1: $84.54
  • Traffic Source #2: $3,065.46

Net Profit:

$336.55

Ouch.

2014 Affiliate Marketing Results

Now that I’m into my 2nd year of these affiliate marketing reports, here’s a recap of how 2013 fared for the entire year:

Year Gross Expense Net ROI
2013 $823,884.01 $555,024.33 $258,859.68 46%
Total: $823,884.01 $555,024.33 $258,859.68 46%
Monthly Average: $68,657.00 $47,085.36 $21,571.64 46%

And here’s a monthly breakdown of 2014 so far:

Month Gross Expense Net ROI
January 2014 $10,922.80 $8,908.47 $2,014.33 23%
February 2014 $25,941.97 $15,900.52 $10,041.45 63%
March 2014 $24,202.06 $15,408.95 $8,793.11 57%
April 2014 $3,486.55 $3,150.00 $336.55 11%
Total: $64,553.38 $43,367.94 $21,185.44 49%
Monthly Average: $16,138.35 $10,841.99 $5,296.36 49%

So, that hurt things…

Still though, things aren’t all that bad. Taking a look at my spreadsheet, since I started recording my numbers in January 2013, my overall average month net profit (spread across 16 months) is $17,502.82.

As I said before… when things are good, things are really good. The great months definitely more than make up for the poor months such as in this case.

Net Profit Projections

This is just a reminder that I decided to cease including my graphs for projected future numbers, as I decided that there really are no trends when it comes to affiliate marketing. It’s simply far too volatile, and so much of it is out of your control.

April Recap

So what happened?

I run a bunch of offers spread over a number of traffic sources, which are again spread over various campaigns, creative, etc.

As a result, when you see my numbers drop dramatically as they did in April, it’s almost always a result of everything going bad at once. I was dropped from a few offers, there was increased competition on some traffic networks (which caused me to pause my campaigns there entirely), and some advertisers decided to drop their rates.

So really, I basically just paused most of my stuff. I didn’t launch anything new either. Instead, I spent my time catching up on my other work.

May Plans and Predictions

Normally in this section I list the plans I have for the upcoming month as well as predict how I think the month will fare profit-wise. However, since May has already come and gone, I will be skipping this section in this report since I already know how it went.

I will probably publish May’s affiliate marketing income report around 10-12 days from now (with other posts inbetween) since I’m only one report behind now. And this time, there’s no hint as to how May performed. You’ll just have to stay tuned…

Posted: July 1st, 2014 under Affiliate Marketing 9 Comments

An In-Depth Look at BoxOfAds

June 26, 2014 Posted by Tyler Cruz
Paid Advertisement

I had kept hearing about an ad spy service called BoxOfAds amongst the affiliate marketing crowd for a while now and finally decided to try them out about a month ago.

My campaigns were starting to become a little bit stagnant and I wanted to try something new to get some fresh ideas and keep things alive and kicking.

Within about an hour of looking into BoxOfAds, I found a couple of landing pages that looked like they had the potential to do well, and took them, made a few small modifications and improvements here and there to match my offers, and split-test them against a direct link (the control).

The results were as follows:

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While the 2nd landing page converted at slightly less than the direct link, the first landing page ended up tripling the conversion rate, yielding an ROI of over 100%.

The beauty of this is that this landing page can be used for eternity across future campaigns by simply modifying it for each offer and angle, so the value discovered here is in some ways limitless.

About a month after finding this landing page, I can thank BoxOfAds for around $5,000 to $10,000 net profit (I run hundreds of campaigns a month so I don’t know exactly) as a simple result of finding these landing pages.

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Now, BoxOfAds isn’t just about finding landing pages. You can find the exact traffic sources of your competitors, right down to the publisher level. You can even see their collection of ad creative used, countries targeted, tracking links, and more.

Watch My 37-Minute Screencast Walkthrough

Below is a 37-minute screencast I made showing how BoxOfAds works and what it offers. It is available up to 1080 HD, so I recommend watching in HD full screen if you want to see everything properly.:

(Note: You may need to visit the post directly at TylerCruz.com if you’re reading this via e-mail or RSS in order to see it.)

One thing I forgot to mention in my screencast is that BoxOfAds is going to be adding international data into their system (as it currently is only for US) for the PPV Pro Package within the next 2 weeks.

Get a Lifetime Discount

The owner of BoxOfAds was kind enough to offer my readers a lifetime membership discount. They are as follows:

  • PPV Pro: $199/month $137/month
  • Display Pro: $147/month $99/month
  • Combo : $246/month $197/month

Be sure to enter the promo code: TYLERCRU when signing up. That’s with no Z on the end (8 character limit…), so be careful Smile

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Free 1-on-1 Skype Training from the Owner

The owner of BoxOfAds, Luke Jasiak, has also offered free one-on-one training/consulting via Skype to the first 2 people who order the combo package with my promo code.

Here’s a good way to learn the system and get advice, tips, strategies on analyzing competitors.

So there you have it. I’ve been very happy with BoxOfAds so far.

Simply signing up to the system won’t make turn your unprofitable campaigns profitable though. It’s all about applying the information you find there and using it to your advantage.

Get ideas such as themes and angles and apply them to your ad creative and landing pages. Find new traffic sources right down to the publisher level (Ad Network –> Publisher).

See what other affiliates are doing and either copy them or better yet, improve on them.

Posted: June 26th, 2014 under Affiliate Marketing 1 Comment

Affiliate Marketing Income Report: March 2014

June 19, 2014 Posted by Tyler Cruz
Paid Advertisement

See, I told you I’d be back up to date with these soon enough. Okay, okay – I’m not quite all the way caught up yet, but I only have 2 more to go and then I will be.

So the question is: was February just an outlier and an especially good month, or am I starting to make progress with my affiliate efforts again? After months of crap, it was sure good to see that $10K net in February, that’s for sure. It’s a motivational booster.

As with my last few reports, since this report is late in getting published, my memory is going to fail on the particulars of what went on with my campaigns, so I won’t be able to go into too much detail in this post apart from the numbers (which are 100% accurate).

With the obligatory introduction done, let’s begin!

March 2014 Affiliate Campaign Income:

$24,202.06

Just like February, I continued to try some of the affiliate networks I hadn’t used in a while.

You can thank the weird penny numbers due to some currency conversion from EURO to USD…

Affiliate Network Breakdown:

  • Affiliate Network #1: $17,017.04
  • Affiliate Network #2: $6,234.00
  • Affiliate Network #3: $496.00
  • Affiliate Network #4: $334.20
  • Affiliate Network #5: $120.82

Expenses:

$15,408.95

I ended up using a total of 7 different traffic sources in February. If you think that’s a lot. Wait till you see May… Winking smile

Traffic Source Breakdown:

  • Traffic Source #1: $863.61
  • Traffic Source #2: $12,520.79
  • Traffic Source #3: $308.42
  • Traffic Source #4: $1,568.49
  • Traffic Source #5: $100.00
  • Traffic Source #6: $40.67
  • Traffic Source #7: $6.97

Net Profit:

$8,793.11

It wasn’t quite as much as February, but I’m definitely not complaining here. I was still very happy with how March performed.

2014 Affiliate Marketing Results

Now that I’m into my 2nd year of these affiliate marketing reports, here’s a recap of how 2013 fared for the entire year:

Year Gross Expense Net ROI
2013 $823,884.01 $555,024.33 $258,859.68 46%
Total: $823,884.01 $555,024.33 $258,859.68 46%
Monthly Average: $68,657.00 $47,085.36 $21,571.64 46%

And here’s a monthly breakdown of 2014 so far:

Month Gross Expense Net ROI
January 2014 $10,922.80 $8,908.47 $2,014.33 23%
February 2014 $25,941.97 $15,900.52 $10,041.45 63%
March 2014 $24,202.06 $15,408.95 $8,793.11 57%
Total: $61,066.83 $40,349.48 $20,848.89 52%
Monthly Average: $20,355.61 $13,405.98 $6,949.63 52%

I’m nowhere close to doing what 2013 did (I was averaging over $30K net profit a month in the first quarter), but I’m still very happy with these results.

Net Profit Projections

This is just a reminder that I decided to cease including my graphs for projected future numbers, as I decided that there really are no trends when it comes to affiliate marketing. It’s simply far too volatile, and so much of it is out of your control.

March Recap

By February, I was finally able to get back to work pretty much as I had used to, as I finally got my miscellaneous personal stuff more or less in order.

Workwise, I dedicated probably half my time to my affiliate campaigns, and the other half doing other things such as catching up on e-mail, blogging, and updating some of my websites.

Affiliate-wise, I was searching for "the next thing" in order to keep the campaign income flowing. I was testing new offers, various affiliate networks and traffic sources (no new ones this month though), and new targeting, creative, etc.

Pretty much all the new stuff I tried failed though, and so I only had my existing profitable campaigns keeping me pumping along.

April Plans and Predictions

Normally in this section I list the plans I have for the upcoming month as well as predict how I think the month will fare profit-wise. However, since April has already come and gone, I will be skipping this section in this report since I already know how it went.

I plan to publish April’s affiliate marketing income report around probably 8-11 days from now – there’s not quite the rush to get it up as there used to be though, since I’m only a couple of reports behind now. Here’s a preview though – it’s another massive swing… in which direction, you’ll just have to wait and see… Smile

Posted: June 19th, 2014 under Affiliate Marketing 14 Comments