BOSTON (MarketWatch) — Dress up a pig in lipstick and a dress and, underneath it all, you’ve still got a pig. Dress up a bad investment idea in a slick infomercial and it’s still going to be worthy of Stupid Investment of the Week.
And so, when I saw the new infomercial for “Jim Banks’ Probate Profit Made Easy,” it was clear that it was no real improvement on the three-day probate investing seminars that I visited — and wrote about — in January 2006. See previous Chuck Jaffe.
As a cheaper version of the same materials — packaged for a mass market instead of being sold in smaller, free marketing meetings — the educational package may be gussied-up and slick, but it’s still a Stupid Investment of the Week
Stupid Investment of the Week focuses on the concerns and flaws that make an investment less than ideal for the average investor, in the hope that spotlighting trouble in one situation will make danger easier to root out elsewhere. Educational training, while not an “investment” in the classic sense, does represent an outlay of capital with the expectation of a return, specifically something similar to the people whose glowing testimonials litter the Banks’ infomercial and probateprofitsmadeeasy.com.
While obviously not a purchase recommendation, neither is this column intended as an automatic sell signal; in the case of Probate Profits Made Easy — as with the J. G. Banks seminars — there’s little doubt that someone can make money using the methods described therein, but that successful probate investor is not going to be the average guy watching late-night or early-morning infomercials.
Probate investing involves finding properties — primarily real estate, but also personal possessions — where the owner has died and the heirs are trying to clear up the estate quickly. Probate is the judicial process of proving the will, presenting the wishes of the deceased to a court, with an administrator or executor appointed to carry out the instructions, pay off all debts and distribute all remaining assets to heirs and beneficiaries.
Those circumstances can make people desperate enough to unload property at a fraction of its market value, which is where the probate investor comes in, buying the property so that the heirs can move on.
This is not the traditional no-money-down/buy-foreclosures strategy. Death is a recession-proof business that will always deliver a steady flow of possible purchases for the probate investor; depending on whose statistics you trust, the ratio of probates to foreclosures is at least 8-to-1 and as high as 12-to-1. The pool of probate investors has not mushroomed quite the way it has with foreclosures, but it’s also not quite as clear sailing as Banks’ infomercial would have you believe.
Specifically, the commercial and the Web site make it seem like Probate Profits Made Easy is the only training program of its kind. Banks is quoted on the Web site as saying “I’m the only person in the world offering this amazingly simple investment system” — but a quick Web search uncovered two other packages teaching the same kind of stuff. The existence of those products may be what spurred Banks to develop this educational package.
Dealings around death
One thing the infomercial does particularly well is get rid of the “icky” feeling that a lot of people might have over buying the property of dead people. While that macabre feeling was always in the air at the Banks free seminar in 2006, the focus is so clearly upbeat and profit-oriented that even a skeptic would have a hard time thinking that “probate investing” equals “coffin chasing.”
That upbeat feeling may have something to do with Banks’ infomercial being produced by Guthy-Renker, the same company that uses infomercials to sell Proactiv Solution acne treatment, DVDs of the Dean Martin Celebrity Roasts, actress Victoria Principal’s line of skincare products and more.
The infomercial makes it seem as if probate investing is a form of modern-day treasure hunting, which makes it sound like the financial hobby for everyone.
Back in 2006, however, Diana Hill, president of the J.G. Banks Institute, noted that she has “always felt that our best student — the one who puts this into action the fastest — is already an active real estate investor. This is a tool they are not aware of, but they are ready to use it to add to their business.”
The DVD course offers the exact same training, and makes no bones about it. The materials say repeatedly that these are the same secrets that Banks sold for $6,000 in seminars, although most attendees probably paid no more than half of that amount, based on attending promotional seminars that gave tuition discounts.
There is nothing about who this training is right for and who is most likely to benefit from it. There is also no mention of how many trainees actually succeed in probate investing; a Guthy-Renker phone representative said he had “no way of knowing” how many people who buy the DVD actually wind up succeeding in probate investing.
The rhetoric about Banks’ investment prowess has been toned down, as the hype moved from full-page print ads to infomercials. In 2006, Banks was described as a “legendary probate investor,” though there was no real information on how that legend was made; today, the Web site says that Banks considers himself to be the “Godfather of Probate.”
Presumably that means he’s making an offer you won’t refuse, namely to sell the same information from the seminars on the cheap. Probate Profits Made Easy sells for an initial payment of $9.95, plus $14.95 in shipping and handling charges; after the initial 30-day money-back trial period, there are six payments of $49.95 per month for a total cost of roughly $325.
With three tool books, three reference books, nine audio CDs, two DVDs — plus some “bonus programs!” — it’s a low-cost way for someone who fits Hill’s description to actually check out probate investing. It might even be right for people who were intrigued by the Banks seminars, but put off by the price.
But for the average person coming across the infomercial, there’s a real question about how many people never got off the ground in probate investing — or made bad deals and lost a ton of money — for every one of those smiling success stories where the most telling feature is the fine print saying that “individual results may vary.”
View more information: https://www.marketwatch.com/story/probate-profit-training-stinks-no-matter-how-you-perfume-it