The Point of Crowdfunded Real Estate Isn't To Make Everyone Rich

Fundrise, a D.C.-based real-estate crowdfunding startup I profiled last November, has since been getting a lot of attention for its proposal – which is either promising or mind-boggling depending on your perspective – to sell small shares of local real estate to people who live near it. Most recently, Matt Yglesias at Slate wrote about the concept last week (and confessed that he had put in some of his own money). This week Jonathan O'Connell at the Washington Post interviewed wealth managers skeptical of the fine print.

Yglesias is doubtful that the idea will take off because a storefront in your neighborhood is an inherently risky, idiosyncratic investment when you'd probably be better off putting that same money in a mutual fund. But he also says this: