My year started very interesting. I was stunned last week whenAdam Strongadvised me on New Years Day that Foreclosure.com parent company had declared Chapter 11 bankruptcy just a week earlier. I read the story in theSouth Florida Biz Journal with my jaw hanging down. Man, did I dodge a bullet! Then another article appeared today in a second publicationInman.comwith more juicy details and some history and a couple pending lawsuits. BIG lawsuits.
What jumped out at me the most was the $9 million in
assets and the $27 million in liabilities. That seemed to dove tail with the
value Brad Geisen himself put on this deal. $20 million. That deal would help his spreadsheet. It also helped to explain why his valuation was higher than my $16-$18 million.
My attorney was labeled a 'Deal Breaker'
which in hindsight saved my bacon after 15 months of trying to get to a
permanent contract while operating under an LOI. I was not happy that I spent 60% of the money they were
paying me negotiating this deal and ended up walking away with nothing. In hindsight that was a small price to pay to protect and now save one of my most
You can't say the motives behind what someone does
but you sure as hell can speculate and when I do, I don't like what I see. It
just reinforces how I do business and the power and freedom to walk away from a
$20 million deal that would have turned out very bad. I am sure this is not the
last we hear of this and whether they survive or not may not be up to them.
At some point I will write more details about the deal. I posted about the initial breakdown back in October 'Foreclosing on Foreclosure.com'. It started turning south in August when
they defaulted on their monthly payment. I continued to send them traffic in good faith as I
thought we were close to getting this nailed down. In fact, I was just wasting
my time and getting jerked around. But better that than losing the domain name
for pennies on the dollar. So what some may have thought was weakness when this fell
apart as actually strength in walking away. What gets my dander up is in my
heart I believe they knew this was coming and the fact they would not sign the
deal that mirrored the fail safe in the candy.com spoke volumes. How could you not know in August, September and October that bankruptcy was looming just WEEKS later? I don't forget SHIT like that and folks need to know the skinny on all this.
Knowing when to say 'No' and walking away has been my single biggest strength in business since the 1970's. Even when I could not afford to say 'No', I did. Each time the future proved the decision to be a good one. Never give in to the pressure. It is your RIGHT and your DUTY to walk away from bad deals or deals that don't cover everything. Walking away from a $20 million Property.com deal (My biggest deal ever) only makes the domain more valuable and I feel 100% vindicated that I followed the advice of my attorney. It was one of the toughest decisions I ever made and until New Years Day, one I questioned daily and my greatest defeat is now my most cherished victory!
Have a GREAT Day!
Wow is right Rick! I’m a”little guy” with a few hundred domains, 20+- in action with affiliate links. But even little guys gotta feed the kids. Foreclosure.com is one of my primary sources and I was netting over $600 a mo, but it has steadily dropped from there, even as foreclosures have increased as has my traffic. Check would come between the 18th and 21st every month. End of last mo no check, I email support, hear nothing, do it again, still nothing, then I get my check in the mail, it was a cashiers check! Guess I better start plugging in the other main foreclosure affiliate?
On the money Rick, great to see this unfolds, and time again where trusting your gut instinct works for you.
Two thumbs up.
Hmmm I seen had signs too —
Simple signs like affiliates seeing their checks dwindle -“Walks like duck….” Fact is – Foreclosure seekers are so down and out and overwhelmed.. – They can’t even begin to look for deals – Therefore subscription revenue falls..
Sold this asset to them in 2002 – But was paid in full – Thankfully:)
Seems good times are also good for”bad times” businesses.
I’ll bet you get a better ‘genuine’ deal for the name in the coming months – things have a way of turning out like that.
I can’t get over the irony of this ie A FORECLOSURE SPECIALIST GOING BUMP ~ And in a market boom.
I’m in the UK and I’m not familiar with this former outfit but complete mismanagement seems to be screaming at me.
Nice call Rick ! Close shave indeed.
I own ForclosedHomes.com and at one time I sent traffic to them and I was very happy, but doing much better at RealtyTrac affiliate. They had a great business model but it sounds like bad management took this company down.
uk dentist jobs
wow! you said it. Rick, you always have incredible blog posts, and it is so lucky Howard is one of your best friends to advise you. working with your gut is best way. i have always said, property.com is the best domain possible, in previous posts. the best. no question.
i feel no pity for the people who are going bankrupt, there is a sweet irony those profiting from all that misery lose out same way.
back to why its the best name. domains like sex.com & porn.com , their value is diminishing imho because of all the huge tubesites, i would guess less type in for adult geenrics these days because of the branded one.
the uk, canada, australia, (the rest of the world that still speaks english, lol) uses property, not real estate, and property can mean everything, from the pen in your pocket to the home you sit in, to the holiday home you have your eye on.
i think its a mid 8 figure domain
lucky boy all round!
Congrats on making the right decision.
ALWAYS go with your”gut”. That is your sub-conscious that remembers all the little things you’ve learned over the years, things people told you, things you’ve read.
You may not know why you are thinking one way or the other but you know you’re right.
David J Castello
Well done. You dodged a bullet where most guys would have stuck their head down a cannon chasing the money.
Thanks for the additional info and insight, Rick.
There’s a better use for foreclosure.com.
Email me if you’re interested.
Sorry, but property.com is definately not worth $20M, not even $2M.
For property.com to be worth around $20M, it should make a net income of more than $250k/month …which it is definately not doing…not even close to it. When they offered you $20M, you should have known there is something wrong here. Why dont you put property.com at your traffic auction with a starting price of $2M…i bet it will not get sold…not even a single bid at $2M. For it to be worth $2M, it should be making atleast $40k to $50k per month net income…which it is not doing…so its not worth even $2M…anyways, good luck with it…hope you the best!
John Beck Tele Seminar
The drop in foreclosures will be due to better national and local economic conditions, including a strengthening economy, slower house-price depreciation and tighter underwriting of mortgages.
You are wrong
Property.com is worth a lot more than 2 million. Whomever came up with that horrible math stating that Property.com would need to make 40K to 50K per month to be worth 2 million simply does not understand anything about the value of a great name.
The name would sell for well over 2 million at any auction of serious bidders. That fact alone makes it worth over 2 million.
But the math you gave was so bad…..at 500K per year in net earnings you are putting an earnings multiple of 4 on the name.
Warren Buffett made billions with worse deals than that.
Rick has been around for a while and has seen it all before. When you have valuable assets then you need to think of all potential situations and have adequate contingencies. Business is war, your weaknesses is what your competitors or alliances will exploit.
As for mismanagement, well plenty of corporates going under in the recent past have nothing to do with being”mismanaged”. They have been gutted by pernicious”businessmen” knowing it is easier to scam investors than make an honest dollar. The companies’ legislation is far too soft and incentivises this approach.
burjkhalifa.com -The World’s Tallest Skyscraper in Dubai, domain name grab & controvesy needs feedback from Rick & others.Who is the owener? What may come for the owner? How much would it face? Can the BurjKhalifa authority recapture the name back through court? etc.
The buyer refusing to agree for full domain return (should he default on payments) sent a clear signal. Either he anticipated exploiting Rick & the situation knowing that Foreclosure.com would have Property.com as an additional asset they could use as leverage in the forthcoming financial crisis, or … that was some passive way of walking away from the deal. In other words, Brad purposefully sabotaged the deal by refusing to concede that one obvious sticking point. Perhaps he chose that route instead of acknowledging his company was not equipped to fulifll the payment schedule that had been discussed.
In either case, I see and hear some low class back stabbing tactics at play from Foreclosure. Walking away in restrospect was exactly the right thing to do. As always, hope for the best but prepare for the worst.
It’s marvelous to hear this kind of story, because my own history has shown when I listen to others, instead of following my instinct, it goes very badly.
Everyone has an opinion or a soothing comment. When one gets blunt, one should be prepared for people to say one is tactless.
Again, it’s great to hear this kind of story.
It will be interesting to see how this turns out. It seems like their business model was pretty decent, they just didn’t react to market changes; increasing expenses when revenues were dropping, without any significant efforts to increase sales in other ways.
For Property.com, there is no domain more ripe for a serious development project. Someone who really knows how to manage an online business could make that into something special. It’s not an easy thing, but that name is worth the effort.
Another day at the OK Corral.
Walking is hard to do but you have to follow your gut.
You are one very good salesman. I for one have never typed in the search term word property. The only time I might naturally use the term is in relation to lost property.
Wait! I thought one word dynamite domains can NEVER fail?! hahahaha I do agree we need to stay positive but on this point I will always disagree with domainers. Rick buys low and sells high – the people buying high, in my opinion, are making flawed decisions. I don’t know the particulars of this deal because I have not followed the discussion – all I am saying is one word high value domains like toys.com, pets.com, etc. are not always good buys.
moral of the story is ‘follow your gut’. this domain will sell for an epic amount one day imho
teh best article myself have read on teh very first day of teh year. thank you quite much
Anyway, you felt it was about time you posted