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In this country, economic disaster for some people has become an opportunity for others. The disaster was the wave of home foreclosures in the recession. Some big investors are seizing the chance to turn those homes into rental properties.

Chris Arnold reports.

CHRIS ARNOLD, BYLINE: For decades now, you've been able to rent a single-family home in many parts of the country. But most are owned by mom-and-pop landlords. Sometimes it's the nice old guy up the street who owns a couple of rental homes, and some even offer advice on how to do that on the Internet.

UNIDENTIFIED MAN: Buy your own house that you're going to live in, and next you want to buy an extra house that you can rent and that will help you make payments on your original house.

ARNOLD: But it's not just mom and pops like this anymore. With the collapse of the housing market, some professional investors with a lot of money smell an opportunity. Right now, there are fewer people able to own a house and more people looking to rent. That's driving up the cost of rents. Meanwhile, there's a glut of foreclosed properties being sold on the cheap. Jack Macdowell is the chief investment officer of Carrington Capital Management.

JACK MACDOWELL: We've partnered with a private equity firm looking to deploy $450 million into the rental space.

ARNOLD: So Macdowell's saying he's looking to spend nearly half-a-billion dollars buying up foreclosed homes and turning them into rental houses. And he's not alone. Doug Brien is a managing director of Waypoint Homes in Oakland, California. He's buying in California and around Phoenix.

DOUG BRIEN: We've purchased almost 1,300 homes. We actually bought 137 homes last month.

ARNOLD: Brien, it turns out, is actually a retired NFL field goal kicker, mostly with the New Orleans Saints.

UNIDENTIFIED MAN: So how did you go from kicking in the NFL to this?

BRIEN: You know, the entire time I was playing, I was investing in apartment buildings and learning that business. And when I retired in 2005, I went to work for a real estate investment firm for several years.

ARNOLD: And one thing led to another, Brien co-founded this company, buying up foreclosed homes. And now he's lined up $200 million from an investment firm.

BRIEN: This is a new industry that's unfolding. There are no brands. This is really an unprecedented opportunity for us to come into a new space and be the one to set the bar in terms of how this industry's going to be run.

ARNOLD: Still, there will definitely be challenges. Scott Simon is a managing director at PIMCO, a firm that's one of the biggest mortgage bond investors in the world. He says there's a reason that the landlords are mostly mom and pops.

SCOTT SIMON: It works really well if you do them in your own neighborhood and you buy five homes and you manage them yourself. It gets a little dicier as you get to 100.

ARNOLD: When you get up above a thousand homes and you're trying to manage 50 broken furnaces, people not paying rents, leaky roofs, spread all over three or four cities...

SIMON: That scale gets somewhat dubious. The numbers aren't quite as good. But there's a tremendous amount of money in the private equity space, for example, that's chasing these sort of investments.

ARNOLD: And, if it continues to grow, Simon says it's conceivable that these investors could convert a million or more foreclosed homes into rentals. That means these homes wouldn't be sitting there for sale, weighing down the housing market.

SIMON: And it would take off the excess supply. So it would actually be a very good thing for single-family housing.

ARNOLD: Housing advocates definitely have some concerns, though. Andrew Jakabovics is a policy director with Enterprise Community Partners. It's an affordable housing nonprofit. He says in the past, when speculators have started buying up a lot of houses, that's sometimes led to problems.

ANDREW JAKABOVICS: They would slap a coat of paint on the property, stick an unsuspecting household in there, either as renters or as owners, and there would be no maintenance of the property. And so you'd have further deterioration of places that were already hard-hit by foreclosures.

ARNOLD: So Jakabovics wants to work with the government and investors to develop some safeguards and guidelines. Meanwhile, the government-owned mortgage giant Fannie Mae is starting to gear up to sell thousands of foreclosed properties through bulk sales to investors. Chris Arnold, NPR News.

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