Hey,

It's been a while. If you don't remember signing up, Supermode is where I share what worked, what didn't, and what I'm still learning from buying and managing rentals.

For this first issue back, I thought I'd write about why I fired my property manager and how we ended up managing the properties ourselves. Because I know I'll get questions about why I didn't catch the problems earlier, I'll start with the story. Then I'll show you the numbers.

My Story: When I started buying rentals, I was still working in consulting. I thought I could put together the money, buy properties with loans, and have a property manager handle everything. Once enough rental income was coming in, I could leave my job, travel, and spend my time doing things I enjoyed. I really did think I wouldn't have to do much after buying the properties. That was what passive income meant to me.

In the beginning I managed them myself to save some money. (I figured, how bad could it be?) But as I bought more, managing the existing properties started competing with buying more properties for the little time I had. This was 2020 and 2021, interest rates were low, and I wanted to buy as much as I could while I was finding deals that made sense.

How I Found a Property Manager: I asked local investors for referrals, spoke with several managers, and interviewed them before choosing one. For a while it felt passive, and I was happy with it. I could work my job and spend my free time looking for the next property.

Then I stopped seeing money come in. The properties were supposed to produce a 10 to 12% annual cash return on what I had invested. At 12%, every $100,000 I put in should have left me with about $12,000 a year, or $1,000 a month, after property expenses and loan payments. I wasn't seeing that, and I didn't have statements that explained where it was going.

Some months I didn't get statements at all. When I did, I spent a couple of hours a week going back and forth with the PM to understand them. Once I understood the numbers, I found tons of errors. I couldn't match some expenses to a property or repair, and I didn't know why the charges were so high.

And I kept buying more properties. I knew I needed to plug this hole. I just didn't know how bad the hole could be, and I kept putting off finding out. Most of my free time was going into the next deal instead of the properties I already owned.

What I Found When I Finally Looked Into It: I stopped looking for more properties and went through every single expense. We had units sitting vacant for months in areas with plenty of demand. Some tenants weren't paying on time, there were evictions, and with some repairs I couldn't tell what had been fixed or whether we were paying for the same problem again.

I also went through the management agreements. There were fees for finding new tenants, renewal fees, markups on repairs, and a share of late fees. I wanted tenants to stay, pay on time, and take care of the properties. But the manager could make more money when a tenant left, paid late, or needed a repair. I didn't like how that worked.

At first I thought it was the company I had chosen. So I fired one PM and hired another. We kept having similar problems, and eventually my partner and I decided to bring it in-house.

How We Set It Up: We had roughly 30 units by then. We hired a remote virtual assistant, or VA, and started writing down how we wanted the work done. My partner was great at this. He enjoyed working through the details, while I was more interested in the strategy, so we worked on it together.

We made instructions and templates for the things that kept coming up:

It took months to put this together. Whenever something happened that we hadn't covered, we added it to the playbook. Hiring the VA was straightforward. Getting the operation to run without us constantly checking on it took a lot more work.

What We Were Paying at the Time

The difference between those two payments was about $3,400 a month. That was a big reason to do it, but there was more going into the operation than the VA's salary.

Notes:

What We Do Differently: A lot of property management repeats. We could write down how we wanted those jobs handled, then improve the process when something wasn't working. Today, software does much of the tracking and follow-up, and our team handles the conversations and decisions that need a person.

Here's a side-by-side comparison of some common approaches and what we do:

With leasing, we're trying to have the next tenant ready to move in when the previous tenant leaves. It doesn't happen on every turnover, but listing before the unit is empty gives us a chance to do that.

Results From Our Rentals

We saw a 50% increase in cash flow after taking over from our previous PM in 2024. In 2026 so far, we've collected $98 of every $100 in possible rent. We also had one empty unit that was missing $1,900 a month in rent, which our team listed, screened, and leased in two days.

A few notes on those numbers:

Other Things We Had Missed: We were also paying costs that belonged to tenants under their leases. Once we kept better photos and records, we could bill for damage and their share of utilities.

And we made mistakes ourselves. We paid for repairs that failed again because we had accepted a contractor's diagnosis without checking the history of the property. Now we look at the previous repairs, photos, diagnosis, and proposed work together before approving a significant repair. (Bringing it in-house didn't mean we suddenly knew everything.)

How I Would Start Today: If I were buying my first property and still testing whether I liked rental investing, I would hire a PM first. I'd want to go through buying and managing a property before spending months building an operation. But I'd stay involved enough to understand the rent, expenses, and money left over each month.

If I knew I wanted to keep buying properties for years, I would hire a VA from the beginning and give them a system to follow. There would be more work up front, but I could use that same system as I bought more properties and add help when needed.

I knew I wanted to keep going because I enjoyed the work. One day I was building a financial model, another day I was setting up automation, then I was learning how to negotiate better with a seller or working through an operational problem. Every day was different. It made sense for me to build a full operation because I wanted to keep doing this.

If I already owned a few rentals, I'd spend some time going through their numbers before spending all my time looking for the next one. In my case, there was money I could have been making from properties I already owned. I wish I'd looked into that sooner.

What We're Doing Now: Today I own around 40 units, and they're fully passive for me. One person runs the day-to-day work. I can see what's happening without answering every tenant message or chasing every repair myself.

The operation we built has become a company that manages rentals for other owners too. They get the same team, systems, and reporting we use for our own properties. The company charge 4% of collected rent plus a share of the rent increases, savings, and recoveries it creates. There are no placement or renewal fees, add repair markups, or keep part of the late fees.

The playbooks have changed a lot since we hired that first VA. I'll keep sharing more of what we're doing on the management side in future issues, including how we organize the work and what we've had to change along the way.

Book Recommendations:

Here are the three real estate investing books I'd start with:

After that, I'd read about:

Dale Carnegie is a good place to start for the last one.

Cheers,

Vidit