“We outgrew the last space as soon as we had moved in,” said Edelheit as he weaves through a maze of desks, followed by his panting dog Frankie, to get to his office. There he shows off his stand-up computer work station that he fabricated out of a small shelf from Ikea. Many of his mostly-young employees stand as well, as they search for homes to buy, rent, market, and manage. The energy is palpable.

“In terms of risk and reward, I feel that this is a generational opportunity,” Edelheit noted.

Two similar REITs, Silver Bay Realty Trust and Altisource Residential just went public in December 2012.

Analysts at KBW estimate cash returns on investments in REOs are in the 5-7 percent range, while total returns could reach 15-20 percent. (Read More: Bank of America in $10 Billion Foreclosure Settlement With Fannie Mae)

Article source: http://www.cnbc.com/id/100366417