Remember those stories about all those investors paying cash to acquire rental properties?

Remember how they were going into single family rentals?

Well, it looks like the rush for the door has begun:

A year ago, buying foreclosed homes to rent out was the sure-thing trade for investment firms backed by money from private equity companies, hedge funds and pension systems. But with the supply of cheap foreclosed homes dwindling, some early investors are looking to cash out a bit by flipping homes to competitors.

The Waypoint Real Estate Group, one of the first companies to raise money from private investors to buy foreclosed homes, is quietly shopping as many as 2,000 houses in California that it acquired in the last few years in several private investment funds, said three people who had been briefed on the matter but were not authorized to discuss it. The homes, which are largely rented, are being shown to other companies backed by investor money that have also scooped up distressed houses in states including Arizona, California, Florida, Georgia, Illinois and Nevada.

Waypoint is considering selling about half of its 4,000 homes. Some of the biggest institutional investors in the market for foreclosed homes — companies like the Blackstone Group, American Homes 4 Rent and American Residential Properties — have slowed their pace of acquisitions in response to an increase in home prices and a dearth of foreclosed homes that do not require significant renovation.

Waypoint is following other early investors like the Och-Ziff Capital Management Group and Oaktree Capital Management, which have sold homes bought near the start of the financial crisis. But unlike Och-Ziff and Oaktree, Waypoint is not leaving the single-family home market. It is still managing more than 7,000 homes for a publicly traded real estate investment trust, or REIT, it formed last year with the Starwood Capital Group called Starwood Waypoint Residential Trust.

Jason Chudoba, a spokesman for the trust and Waypoint’s management company, said the firm did not comment on market speculation.

The single-family home market, after a wave of acquisitions by companies backed by Wall Street money, is changing as institutional buyers now focus more on expanding their operations to manage tens of thousands of homes across the United States. Industry participants say that the rapid buying of foreclosed homes has ended and that they expect other early institutional buyers to sell homes to lock in profits. They say they also expect the business to consolidate into the hands of a few large companies.

So, the small operators are getting out, and the big operators, aka the too big to fail operators are doubling down, because they figure that they know better.

In a way, the TBTF players are right:  When this comes tumbling down, the taxpayers will find a way to bail them out, yet again.

We are f%$#ed.