Secondly, while the REITs tout their experience in buying a portfolio of homes, none of them is contributing their legacy portfolio to the newly-formed REIT.

"They are keeping the juiciest opportunities for themselves," said Crowe of the companies tapping the market. "You are not buying a stable portfolio. You are buying an acquisition story."

Waypoint Homes Realty Trust for instance, will be externally managed by WREG, which has invested more than $500 million in 3,500 homes in the San Francisco Bay area, Los Angeles, Atlanta and Phoenix among other cities. But investors in the new REIT will not own this portfolio of homes.

The market is wary of single-family REIT IPOs as well. Both Silver Bay and American Residential are trading below their offer price.

Clearly, the market would rather see these REITs prove their business model. So it may be best to wait and watch.

-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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