SLENTRE.COM

by Vissarion Obolensky

Syd Chase is getting attention. The former Army Combat Engineer instructor and Washington D.C. undercover private detective became an entrepreneur in the 90s, signed up again after 9/11, then returned yet again to business, rapidly becoming an independently wealthy international financial advisor and mentor. Now CEO of the Syd Chase Group at www.sydchase.com, Chase has been looking for new worlds to conquer. And what worlds are newer or richer in real estate possibilities than virtual worlds like Second Life? Through his avatar, Sydney Chrome, Chase has been taking an expert’s professional look at the world of money, investing and real estate in Second Life. He spoke recently to Slentrepreneur reporter Vissarion Obolensky about where he feels the virtual economy is going.

(Second Life’s Sydney Chrome, aka Syd Chase in RL. )

So – where is Second Life going, economically?

“Right now I’d say it’s going down,” says Chase. “The First Life economy is falling to pieces, and the effects of that are already rippling through Second Life. On top of that, Open Source sims are right around the corner. Once they open their doors, I expect it’ll be like the opening of the Western frontier. Many residents here will leave, and a good chunk of what might have been new residents will find land and homes elsewhere. Land and home buyers will have more and more competing alternatives. That means price wars and pricing cuts.

“Then there’s Linden Labs. It’s no secret that they’ve already made moves driving down land prices artificially. They’ll keep doing it. They have to. Linden Labs has never turned a profit since Second Life began. It’s investors and supporters that have been keeping it going. But that source of income is drying up, because of the collapse of the real-world economy. Linden Labs needs to start making money if it’s going to survive. And what better way than to create a ton of new land, and to buy most of what’s already there, and then to start leasing and renting it? And if you’re buying, you want to do everything possible to lower prices before you buy. They’re in a position to do it, so I expect they will.

“Add everything up, and it’s a clear picture. Land prices are going down. Way down.”

Do you think people should stop investing in virtual worlds completely?

“Not at all! A crisis is an opportunity. Falling prices means bargains for investors. Prices in SL aren’t touching bottom yet, and so I’m not buying at the moment, and I wouldn’t advise anyone else to buy right now. But is the time coming? Absolutely. I have every intention of investing here and building, and doing so in a major way – when the time is ripe. It isn’t ripe quite yet. But that doesn’t mean I’m not making preparations. In fact I’m engaged in talks with one of the leading SL designers and architects right now. It’s true that, short term, things are difficult, but only bad investors think in the short term. Virtual worlds and what’s being called the 3D or Visual Web are the wave of the future. It’s where the web is going. And where the web goes, the smart money goes too. People who invest in virtual worlds over the next few years stand poised to make fortunes.”

Would you say that your views apply to investing in Second Life generally, or just to Second Life real estate?

“I think small businesses here could see some growth. When First Life money becomes tight, high-ticket luxury item sales tend to fall. But luxury items in Second Life are a matter of pennies. If the dollar price of a new car or a new dress in First Life starts to pinch, people with SL accounts could well satisfy their shopping impulses by buying more items inworld, and more luxury items in particular. I expect these areas will see some growth.”

Do you think then that only small investors should put money into Second Life?

“Everyone who can afford to invest, should. But they have to be able to afford to invest. And they have to know what they’re doing. My firm, the Syd Chase Group, takes on smaller investors as well as large ones. But we never take on a client without looking at their financial situation and resources overall. An investor has to start from a secure base. Ensuring that they truly are secure is our first priority.

“But there’s more to investing in Second Life than just making money. Don’t get me wrong. The best way to make money in Second Life is to make money in First Life. But for that, Second Life is one of the best resources imaginable. For new investors, it’s the best possible way to learn about real estate and real estate investing. For a few dollars, you can start looking for properties today. You can begin assessing land and homes. You can rent, lease, sell, negotiate. You can develop and test your skills in hundreds of ways. The properties are virtual but the situations and the deals and the people are real. And if you lose? You lose the price of an movie ticket! It’s the ideal teaching situation – which is one reason why I plan on teaching classes about it here shortly.

“And there’s one respect in which Second Life is unmatched, something that makes it one of the best business resources anywhere. Networking. In First Life there are all kinds of barriers to connecting with people. Location, language, secretaries — obstacles great and small. In Second Life you can connect in ways and at speeds that aren’t possible anywhere else. And the people you meet here could easily be movers and shakers in the world outside. Buying and selling virtual real estate isn’t really the best way to make significant amounts of money. But connecting with buyers and sellers – that’s the way.”

What should you do if you’re a current real estate owner or land owner in Second Life?

“Short term? Do nothing. Selling now means taking a big loss. Selling later means taking a bigger loss. All you can do is hold on to your properties till things turn around and invest any other funds you may have elsewhere.”

Where?

“First Life. Right now you want to invest in tangible real estate, not virtual real estate. For American properties in particular, there’s never been a better time to buy. Anshe Chung, as usual, is the person to watch. People here may fault her about other issues, but right now her instincts are good. I’m told she’s moving into First Life real estate in a big way. That’s absolutely correct. In Second Life, things are on the down slope. In places in First Life, they’re not heading down: they’re scraping rock bottom. That means fire sale prices and historical lows. When things turn back up, property values will skyrocket – for those who make the right investments now. That’s the key. Anyone who’s made money in property in Second Life now needs to take it to the next level: they need to put their investment money into property in First Life. True, some Second Life investors may never have done it. They need to work with someone who has.”

Someone like Syd Chase?

“Well, someone like the Syd Chase Group. Not just me alone. Real world real estate is complicated. Too complicated for any one person to always get the best possible deal. Taxes, insurance, fiscal analysis, reviewing thousands of property listings, assessing homes and neighboring property values – if you don’t want to lose your shirt, you have to wear a dozen hats: lawyer, real estate agent, financial analyst, the works. It’s teamwork. You either have to find a team or put one together. I happen to have put one together. They’re a fine team too. Each one an expert specialist in their own way.”

Have you found many people here interested in investing in First Life properties?

“Interested in investing in the world outside? Yes, I’ve had a few discussions with people about investing outside Second Life. We’re also looking for people to representing our firm inworld. The Syd Chase Group has a First Life affiliate program where we take on representatives. Having representatives in Second Life is a sensible next step. Of course, in both cases we’re selective. Not everyone is qualified.”

Where does that leave people who want to get further involved?

“Well, at the moment I’m planning to give a series of talks and classes. A firm called Xenius Revere is opening up a new university-style learning center called Xeniversity. They are definitely a company to watch. I plan on giving seminars on investing, finance and real estate at their new facility. I may present a few chapters from a book on investing I’m working on. And once the time comes to buy properties inworld, I definitely have plans to expand and build.”

Plans to build?

Chrome’s avatar spread its wings. “Oh yes. Big plans.”

Such as?

“Well – I think I should save the details for when everything is in place. Let’s just say that long-term, I’m very optimistic about the future of Second Life and Open Source sims in general. Very optimistic. I have every intention of buying and building here once things settle. I’ve got to admit, I’d personally like to build a really special members-only jazz club one of these days. I’ve become a regular at Phat’s Jazz Club. That place is so good it’s inspirational.”

Speaking of inspiration…

“Yes, I’m a Christian. I figured you’d see that on my profile.”

I was wondering if you had any thoughts to share about faith and business here in Second Life?

“I think if a person has faith, they should live it, not talk about it. So I won’t make a speech. But I do think business and faith support each other. You have to make money if you want to do good. I didn’t start out rich, and one of the worst things about not having money is not being able to help others. You want to have the means to do something for your wife and your children and your friends. You want to help people in general who need it. But how can you give if you don’t have anything to give? All you can do then is look on. That’s a bitter feeling. I agree with Joel Osteen: God wants you to prosper. He wants you to be a success, to be everything you can be. Money helps you to do that, and poverty doesn’t. Poverty cripples. It limits what you can do, for yourself and for others. When there are so many people that need help, when there’s so much that needs to be done, how can you not want to make yourself able to contribute all you can? It’s not enough to want to build a better future. You have to have the means to do it.”

Tell us about that future? How does it look?

“For Sydney Chrome? Well, things look pretty good. I’m currently looking to set up a small virtual office inworld to meet with friends and clients. I’ll be at Phat’s, meeting people; and at Xeniversity, giving talks and classes; and at new offices, writing and working out plans for future investment and development here.

(Sydney Chrome posing at Phat’s Jazz Club in Second Life.)

“And as Sydney Chase? I’ll be in First Life, making people wealthier. More and more my firm has been working with European and other foreign investors interested in American properties. I plan to travel to Scandinavia soon, and probably Europe after that. Investors in those countries know what Second Life investors need to learn: that there’s no better way of making money at the moment than purchasing American real estate. There are opportunities there now that we may never see again. I’m giving that market my complete attention. Anyone with anything at all to invest should too.

“As for the future of real estate itself? It’s right here. The fact is, we’re living in a revolution, one of the greatest developments in history – the cyberspace revolution, and Second Life is at the cutting edge. Technology is advancing so rapidly that the sky’s not the limit anymore. There are no limits. And history won’t be very forgiving to those who don’t make the effort to learn about it and explore it. Either we learn to sail that tide, or we drown. I’m here to set sail.”

You can learn more about Sydney Chase and the Syd Chase Group at the firm’s new web site at www.sydchase.com.