Figure this one out (from the WSJ):

Beazer Homes USA Inc. (BZH) hopes becoming a landlord will carry it through the worst housing downturn in decades: The builder is acquiring newer homes in distress–including some it built–and renting them out.

The Monday announcement shows just how desperate the industry has become: Builders are unable to compete with bargain-priced foreclosures, some located within walking distance of new homes under construction. It’s also an acknowledgement that many consumers cannot buy homes or they no longer consider housing a sound investment.

That’s forcing builders to find new ways to make money. Both Toll Bros. (TOL) and Lennar Corp. (LEN) have turned to working with distressed loans.

“Making money building homes in 2011, and even 2012, is going to be very challenging for the builders, so I expect more of them to consider creative ways to compete,” said John Burns, head of John Burns Real Estate Consulting.

Beazer, one of the nation’s largest home builders, did not return a request for comment.

The company launched its program in Phoenix, one of the areas hardest hit by the housing crisis. It completed its first home purchases last month and expects to have more than 100 by the end of this fiscal year. The idea might be expanded to California or Nevada, two other hard-hit states brimming with foreclosed homes.

Unsurprisingly, the company has not provided any information relative to its strategy. One has to wonder if indeed there is any explicable strategy involved. A Wells Fargo analyst provides apt thoughts”

“After layering in operating expenses, we do not believe the return is that attractive, given the potential risks of acquiring additional inventory,” Adam Rudiger, an analyst with Wells Fargo, wrote in a client note. “We are skeptical of any home builder’s ability to efficiently manage maintenance of a diverse set of properties in a cost-effective manner.”

It did occur to me that they might be considering buying foreclosures in close proximity to their new homes and bulldozing them as a means of limiting supply. I doubt the economics would work out but given this move, I wonder if these Bozos have the wherewithal to figure that out.

If your contrarian investment strategies include taking some flyers on home builders, let me suggest that you omit Beazer from your list of possible candidates.