GI Partners, a private-equity fund that generated big profits by scooping up empty data centers after the technology-stock bust in 2000, is now making a big bet on foreclosed homes, ready to announce a $250 million move.

The company, which has offices in Menlo Park, Calif., Greenwich, Conn., Chicago, London and Munich, is expected to announce the investment in Waypoint Real Estate Group, The Wall Street Joujrnal's Nick Timiraos wrote Wednesday.

Waypoint picks up foreclosed homes and turns them into single-family rentals. The company, based on Oakland, Calif., offers conventional leases and a program in which renters earn points toward buying a home later.

"Richard Magnuson, managing director of GI Partners, said the private-equity fund could eventually expand its investment to $1 billion over the next two years if the initial round is successful," Timiraos said.

GI Prtners describes itself as "private investment firm focused on investments in asset-backed businesses and properties in North America and Western Europe."