When Baba first came to Shirdi, people there out of respect, started calling Him Sai. When Chand Patil's marriage party arrived in Shirdi, the party alighted in the area near the Khandoba [Shiva] Temple there. The priest Mhalsapathi, recognised Baba and welcomed Him with the words Ya Sai, meaning "Welcome Saint!" When the wedding was over Chand Patil and his party returned to Dhoop but Baba settled down in Shirdi, choosing a dilapidated Mosque as His residence. Later, this Masjid as it was then known, became the famous Dwaraka Mai. In due course, Mhalsapathi became a close companion of Baba. For many years, Baba slept in the Masjid together with Mhalsapathi and another devotee named Tatya Kote Patil. They slept with their heads pointing towards the East, West and the North but feet touching together! If Tatya snored, as he did sometimes, Baba along with Mhalsapathi would turn Tatya over, rub his back and press his legs! Devotees wanting to worship Baba would offer sandal paste but no one dared to directly apply it on Baba. Mhalsapathi alone had the privilege of applying the paste on Baba's throat. Blessed are they who earn Divine intimacy.

According to the scriptures, a Brahmachari and a Sannyasi have to live by begging. Both the Brahmachari and the Sannyasi are supposed to regard the whole Universe as their home, and all humans as belonging to the world-family. Baba resorted to seeking alms, perhaps to make His devotees see humanity as one large family. Every day Baba would go out with a tumbler in His hand and a Jholi or a bag strung round His shoulder, to just a few houses. In the tumbler He received cooked items and liquids, while in the Jholi He collected Bhakri or millet bread. He was content with what He received, and did not have any sense of taste - He was above the senses. The food collected would be put into wide-mouth earthern jar in the Masjid, from which even cows and crows were free to draw! The lady who swept the Masjid also took some Prasadam to her home. In the beginning, Baba did notfollow this practice. He would just disappear into the forest and there, Bayjabai, a woman of great devotion would go out everyday seeking Baba, and offer some Bhakri to Him. Later Baba stopped going to the forest, and that was when He began seeking alms.

Once there was a theft in the village, and the accused claimed in court that Baba had given him the stolen property. The Magistrate then issued a summons to Baba, asking Him to appear in Court and give evidence. When the summons was served, Baba threw it into the fire! The devotees were alarmed by this and afraid of the consequences. They therefore approached the Magistrate and explained that since Baba was a holy person, the issue of a summons was inappropriate. Instead, the Court could send an Officer to collect the required evidence. Accordingly, a Commissioner was sent to interview Baba. The Police Officer went to the Masjid and discovered that he was no match for Baba. For example, when asked His age, Baba replied, "Hundreds of thousands of years." When asked if He knew the accused, Baba replied that He knew everyone! When asked if He gave the jewels and if so, how they came into His possession, Baba replied, "Everything belongs to Me!" The Officer tried to remind Baba that this was an investigation by saying, "Here is a serious charge of theft …." Baba cut the Officer short with the words, "What have I got to do with all this nonsense?" The conversation ended there and the Officer withdrew, having drawn a complete blank!