Steve,
I started out in a very similar way by opening a small property management company in California. I began with a very small scale and almost boutique quality with just two single family homes from a friends parents. I am a true believer that there are enough quasi professional out their posing as property managers that business is always ripe for the taking. My wife and I teamed up to provide a quality full service management company with no marketing with the exception of word of mouth and a few passing remarks on Facebook. The referrals started coming. It was also about the same time I read the "Four Hour Work Week" and began pulling out some of the more practical ideas to implement..Google Voice, EverNote, Weebly, Google Adwords, among other online tools. I tried some mailers but with no success. I started investing time in SEO for my organic results in google & yahoo but that path was time consuming and that industry can lead to many disingenuous methods to boost results. To be very candid, we began really taking off when we used Google Adwords with a budget of 150-200 dollars per month...and the phone started ringing. We went from two SFRs, to 10, picked up a 2 six Plexes...gave them back to the slumlord...picked up a 6 plex, then 26 unit complex, more SFRs, then a 21 unit property, and now a 150 unit HUD building which we begin managing on August 1st. 0 units to almost 300 in about two and a half years. I would avoid a lot of the more costly marketing strategies and focus on providing a quality service with minimal exposure through Google Adwords and Craigslist. Add insurance, bonding, employees, PEO, equipment as you scale up slow & steady. The real beauty of property management is that all of your clients are real estate investors and that leads to all sorts of peripheral business. Good luck!
