A new fund was formed to acquire foreclosed properties and rent them out.

U.S. Residential Asset Fund is expected to invest more than $20 million properties. Christopher Crippen, the fund's manager, said they would initially target Chicago, Memphis and Charlotte.

He expects the next round of acquisitions to come from Atlanta, Indianapolis, Texas and Orlando.

"The U.S. housing trends show that our nation is moving toward rentership and away from homeownership, and I believe we must act fast to capitalize on the available market opportunity," Crippen said.

Crippen was formerly the head of acquiring REO from federally insured banks at Prescient Asset Management.

Many firms are putting billions toward buying REO and converting them to rentals. Analysts recently estimated the yield in some areas on the upswing could be as high as 20% based on leverage.