It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.