LITHONIA, Ga. --- Tim Cabrera eyes the unwanted artwork gracing the interior walls of the house his company just bought: Long streaks and swirls of red and blue spray paint.

The graffiti, probably the work of neighborhood kids, stretches from the kitchen to the upstairs bathroom of the foreclosed home. Even the carpeted staircase has been tagged.

"Unbelievable," says Mr. Cabrera, the chief operating officer of Atlanta-based Pride of Ownership Partners. "They got into everything."

In foreclosed and forlorn properties such as this, Mr. Cabrera and his firm see opportunity, and not just for themselves. They are fixing up the place and others like it and marketing them to people who want to buy but can't get mortgages.

Enter the lease-purchase option, which is surging in other hard-hit states such as California and Nevada, according to Jim Grissett, an adjunct professor of real estate at Emory University's Goizueta Business School.

"At a time when we have both distressed sellers and distressed buyers, I think it makes a whole lot of sense," Mr. Grissett said.

Customers include people such as Cecelia Robinson, 57, a writer who said she fled her home near Baltimore after a bad business move left her on the verge of foreclosure. Pride of Ownership partners is leasing Ms. Robinson a three-bedroom, 21/2-bathroom home here that the company purchased from a bank and renovated.

For three years, Ms. Robinson can continue paying rent or opt to buy the house for the price an appraiser set at the time she moved in. If she chooses the latter, the company will give her a down payment credit totaling half the rent she has paid over that three years, even if she decides to buy sooner.

"It's a fresh start," Ms. Robinson said before showing off an oversized master bathroom she called the one she's "always dreamed of."

To be sure, the arrangement is potentially a profitable one for Mr. Cabrera and his partner, real estate investor Jeffrey Britz, who say they started last July with $1.4 million in capital and have snapped up 50 foreclosed homes across the Atlanta area. The market is still shaky, and for now, the duo can't simply turn around and sell the homes at a profit.

Part of the solution involves helping clients qualify for a mortgage. Mr. Cabrera, who worked as a mortgage broker during the real estate boom, knows just how difficult this has become. That's why new clients are also required to go through a credit rehabilitation program to participate.

Mr. Cabrera, 38, said the rent payments allow his company to break even; he won't turn a profit until he can start selling the homes. He'd had no trouble renting the homes as of earlier this spring, though none of his renters had turned into a buyer.