The Scaling Trap: Michael Lee’s Painful Lessons Of Scale

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What does it really take to scale a property management company?
Not in theory, but in practice. Across markets, with real doors, real teams, and real consequences when something breaks. That is exactly what Michael Lee did.

He left his corporate job, bought a 300-door property management company, doubled it in size, sold to Poplar Homes, and led product teams that helped Poplar grow from 2,000 to 15,000 doors. That is why I hosted him on the Property Management Frame Breakers podcast.

Our conversation was full of insights from inside the operations of a high-growth PM company. His journey revealed three critical lessons every operator needs to understand, along with two powerful ideas that he believes will shape the future of our industry.

^{3 Hard-Earned Lessons on the Road From 300 to 15,000 Doors}

1. You Can Double Doors Without Doubling Headcount

When Michael bought his first 300-door company, he did not hire just to fix the chaos. He automated. Then he doubled to 600 doors with the same team. His story reveals a key principle for profitable scaling. As he put it:

“I was able to get more doors using the same exact employees … I grew from 300 doors to 600 doors.”

This changed the way I thought about growth. Like many operators, I tend to see technology as a cost center. Michael’s model proves it can be a profit center. It lets you add doors without adding equivalent hires. And he had the numbers to prove it:

“I'm proud to say I was... profiting about 24%, 25%, which is, you know... one of the top.”

The core insight is that scaling should not be a reactive scramble. It should be designed from the start. But even if you begin with a mess, rebuilding with the right tech is still the smartest move.Michael did not scale through brute force. He built systems that made growth easier, not harder.

His story shows that when you invest in systems that scale, you grow with less friction, fewer hires, and stronger margins.

2. The 600-Door Wall is a Test of Your Model, Not Your Will

This part of my conversation with Michael felt eerily familiar.

David Normand once told me he scaled to 600 doors and then burned out. Not because the business was failing (in fact, it was thriving) but because he burned out.  He was the engine, the manager, the optimizer. Eventually, the pace became unsustainable.

Michael’s journey to 600 doors was different.

He had a team. He had the tech.

But he still got stuck in the same place, just for different reasons.

As he put it:

“Hitting a dead wall there, 600 doors.”

He explained that pushing past that mark wasn’t just a matter of more hustle. It was a math problem.

Getting to 700, 800, or 1,000 doors wouldn’t just require hiring more people. It would require taking a step backwards.

“To get to the next level... would involve me hiring another maintenance coordinator, another property manager... and until you get that return on investment on those two new hires, you're negative cashflow, you're paying outta your pocket.”

This was not a burnout story. It was about structural friction.

The 600-door wall was not a failure. It was a limit baked into the traditional model.

That is where Dave brought up fixed-cost scaling. This is the idea of keeping costs proportional to revenue so profit margins remain steady. That is what excites him about an AI-powered workforce.

Michael echoed that idea. He had seen what happens when growth depends on people alone. Margins shrink. Complexity grows. And the business starts working against itself.

So the real question is not just how to scale. It is what kind of growth you are building toward:

Option 1: Hit 600 doors. Celebrate for a moment. Then hire more. Add complexity. Lose profitability. Lose momentum. Fight to get it back.
Option 2: Build now with AI. Scale without the burnout. Protect your margins. Celebrate growth. Maintain momentum and keep going.

Paying a penalty when you hit your goals does not feel fair, especially when there is a way to avoid it.

3. Scale Isn't Just a Reward; It's an Amplifier

Michael’s experience at Poplar was a cautionary tale in what happens when you scale from 2,000 to 15,000 doors quickly. On paper, it looks like a win. In reality, it was a hard lesson in how growth exposes everything.

“We went from 2,000 doors to about 15,000 doors in a span of 12 months… and our churn rate just hockey-sticked up.”

“When you scale an inefficient process, you just get more inefficient at exponential levels, which directly causes churn.”

That lesson stuck. Growth does not fix problems. It magnifies them.

Small cracks in your systems become major liabilities under pressure.

Growth is not a trophy. It is a test your business must be ready to pass.

Build What Growth Can Stand On

Michael’s story is not just about scale. It is about survivability.

Growing from 300 to 15,000 doors sounds like success until it leads to churn and chaos. Every new door adds pressure. And pressure exposes weak points.

If your foundation is not strong, what looks like “more” can quickly become “too much.” That is why the real work is not about growing.

It is about building a business that can handle growth.

Michael has seen every phase. Paper to Computer. People-heavy to system-driven. Manual processes replaced by SaaS. And after all of that, he is more bullish than ever before about the upcoming benefits of AI for PMC owners:

“I firmly believe that [profit margin] will go from 30 to 33% to 40 to 50%... I want to stand on top of a mountain and just scream that this is coming.”

And now, that is exactly what he is doing.

Michael has joined Vendoroo to help more operators make the leap by turning AI from a buzzword into real leverage.

Because the companies that build with this technology today will be the ones that win tomorrow.  

Because he believes that those who get to the top of the mountain, have a duty to throw down a rope.

You don’t have to climb this mountain alone.

Our team at Vendoroo is 100% committed to helping you win the next era of AI-First Property Management.

Let’s build what’s next, together.

SCHEDULE A DEMO

—

Pablo Gonzalez,

Chief Evangelist at Vendoroo

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