Blackstone Group (BX) bought 1,400 properties in Atlanta, some eligible for federal low-income housing subsidies, in the biggest bulk purchase for the fledgling home-for-lease industry.

The private-equity firm has spent more than $4 billion on 24,000 rental properties in the last year.

Private-equity firms, hedge funds and individuals are racing to buy into a shrinking pool of foreclosures or distressed home to rent. They're seeking to profit as prices remain 20% below their 2006 peak.