There are plenty of REITs operating in my city that have substantial detached residential holdings.

The EV on renting and holding substantially improves if the housing market takes off like a rocket. It might not work in your market, but that doesn't mean it doesn't exist.

Wild speculation and hypothesis doesn't mean it exists, either.

It's not a hypothesis. You don't need to believe it exists and it may be less common in your market. I know this is true firsthand as in the course of my work, I review the financial and legal side of these entities at times.