Billion-Dollar Landlords: Rental home giant under fire

Some tenants and critics say Starwood Waypoint, which recently merged with Invitation to become the U.S.'s largest owners of single-family rental homes, was slow to fix problems and quick to threaten eviction.
7:51 | 11/17/17

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Transcript for Billion-Dollar Landlords: Rental home giant under fire
Reporter: In Dallas, Texas, disaster in the living room. After Carlos and Ebony January say the landlord did a shoddy repair job on an upstairs leak in their rental home. He didn't cut the electricity off before he drilled the hole into that light. Lucky to be alive. Reporter: In Denver, Chris lynch says he had to uproot his family from their rental home after the same landlord caused their heat to fail during a snowstorm and left broken appliances unrepaired. We feel victimized and taken advantage of. Reporter: And in Broward county, Florida, the parents of Brielle blame the very same LAN lord for their daughter's persistent asthma. Every morning and every night, she has to take a breathing treatment. No 2-year-old should have to do that. ??? Out came the sun and dried up all the rain ??? Reporter: In a lawsuit the parents say Brielle as condition was caused by toxic mold the landlord did not fix. The house started falling apart on us. Literally. Reporter: Including the crack in the living room ceiling that grew and grew. I told him, this is going to be on our couch when we wake up in the morning. And sure enough, it was. Reporter: But that wasn't their only surprise. They soon learned their landlord was, in effect, one of Donald Trump's closest billionaire friends. The man who ran his inauguration. Tom barrac, the cochairman of a giant company that owned their home and test of thousands of other middle-income rental home across the country. You have the ultimate out-of-state, far removed, absentee landlord. Reporter: Aaron glance, who investigated the rental home business for the center for investigative reporting and its reveal website and radio program, says barrac came up with the idea five years ago to buy huge numbers of homes in foreclosure after the housing market crash, then rent them out. Like president trump, Tom barrac is a real estate mogul. He's the kind of real estate mogul who has always made his money by profiting off of other people's pain. Reporter: Barrac's company merged with another big corporate landlord, now called starwood wayput. They operate in at least ten states. In some neighborhoods a huge presence as WSB in Atlanta documented. Critics say you're too big and too distant, you're the ultimate absentee landlord. Exactly the opposite, exactly. Reporter: Charles young is the chief operating officer of starwood waypoint. We are on the ground with dedicated teams, hundreds of them, who are proud what was they do, working with their residents to resolve issues. Reporter: And in their ads, waypoint features some of their happy customers. They've been really great to me and Tyler. Reporter: But reporters and our ABC TV stations across the country -- It's still dripping right there. Reporter: Heard complaint -- A pretty terrible experience with this house. Reporter: After complaint. Then absentee landlord at best. Reporter: Tenants who felt powerless against their distant corporate landlords. We've heard a lot of complaints and our stations across the country have about poor service that you're very slow to fix things. I do not agree with that at all. Reporter: So we showed young the home video of the family in Texas that complained to wffa about the landlord. What do you think of that? One disappointed resident is one too many. We're committed to working with residents. Reporter: We showed him video the parents of prielle made, now suing the company, alleging it failed to fix toxic mold they blame for her pier sister tent asthma. From day one we've been working with the residents -- They had to move out from what they call toxic mold they say your company did not fix. As we look at the situation we're working with residents as much as we can. Reporter: The company claims it took proper steps to fix the problem. You look across our residents, 99% are having a great experience. Reporter: We talked to some of those tenants. John Kaiser told KTRK in Houston he likes waypoint. We've not had an issue when are we didn't have somebody at our home within 48 hours. Reporter: The company told us Kathy Cole of Los Angeles gave them a five-star rating. But she told KABC that was only after it took three years for the company to replace a leaky roof. It felt like I'd stuck my finger in the sock. Reporter: And repair ground wiring that she says nearly electrocuted her in the swimming pool. People don't show up. You sit here all day, the repairs are over and over and over again. You call somebody who has no interest in it. Reporter: And when we checked with the better business bureau, we found they gave waypoint a grade of d-plus. Finding a pattern of complaints involving repair and customer service issues. How does that measure up with a % approval you say you have? A d-plus from the better business bureau? We're listening to our residents, we're working with our residents. You don't think a d-plus rating from the better business bureau suggests there's a problem here with your company? There's always an opportunity to get better. Are you happy with this now? No I'm not happy with that. I followed the laws. Reporter: Our stations found tenants like Susan strasmyer of Tampa facing evictions and ending up in court after they withhold rent to get their problems fixed. She showed WFTS reporter Adam wallser the improper electrical breaker on her faulty water heater that she says she was told by city inspectors could have led to the house burning down. I had to drive by my house every day at lunch to make sure it wasn't burnt down. Reporter: In court the two sides reached an agreement. She avoided eviction and the company gave her a $1,400 credit. Court records show the lawyer in this case has handled more than 195 eviction cases for waypoint this year alone in the Tampa area. At the end of the day, eviction is always the last thing we want. Reporter: A study done last year for the federal reserve bank in Atlanta found the company that would become waypoint filed eviction notices against one-third of its tenants in a year. Sometimes, if rent was only a few days late. They're more likely to have a policy that says, if you're a day late or a dollar short, we're going to evict on this timeline. Reporter: The company told us about 5% of their tenants, about 1750, are actually evicted each year. What do you imagine is the impact on the family when they get eviction notice and they've got to get a lawyer and you've got all kinds of lawyers, they don't? I'll say again, eviction is always a last resort. Reporter: But when it happens, tenants are forced to go to court, then required to pay additional fees and the company's legal costs if they want to avoid eviction. Is that true? They have to pay those fees? Yes, it's true. That's fair? That's part of the process that we have. That's part of your business. It's part of the business. Reporter: It's been a great business, one that helped the already super-rich barrac add millions more to his personal wealth when he sold his interest this summer. Here we are at piyocho ranch, the intersection of a couple of our family's passions. Polo on the one hand, wine on the other. Reporter: Barrack posted this video showing off his billionaire lifestyle. Living the American dream. The nicholsons thought they were living the American dream too, when they rented this Florida home. They loved the garden. Took good care of the place. Until they say it started to fall apart. And their little girl began to have serious health issues. Forcing them to move out when they say the barrack company would not fix the problem. It's not just a house, it's your home, it's your life, it's what you come home to. Reporter: For "Nightline," Brian Ross, ABC news, New York.

This transcript has been automatically generated and may not be 100% accurate.

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