“Definitely not for sale,” reads the Knox Financial lawn sign, which looks just like a “home for sale” sign post. “Turn your home into an income property,” the rest of the sign reads.
Knox Financial, a Boston-based fintech company focused on property investors, launches today in Phoenix. David Friedman, one of the company’s cofounders and CEO, emphasizes their excitement to expand to the Valley. Knox looks forward to showing homeowners and landlords the perks of working with what Friedman calls “a technology-enabled financial services firm focused on the long-term success of their investments.”
In other words, Knox Financial is designed to help homeowners and landlords seamlessly transition a home or property into a rental that can serve as a long-term investment.
“Knox handles every aspect of investment property ownership,” the company’s website says. This includes finding a renter, running background checks, negotiating a lease, securing financing, finding the right insurance policy and handling all the maintenance.
Knox was founded in 2018 by Friedman and Spencer Taylor. Friedman initially got the business idea after losing out on a major property investment. A few years ago, he decided to put his house on the market after considering renting it out. After lots of research, he realized that turning his house into a rental property would be overwhelming. Instead, he sold his house, then two years later he found out that the new owner sold the house for $200,000 more than they paid him.
Friedman decided he didn’t want that to happen again, and he wanted to help other potential property investors to avoid that, too.
Property investing has only been a pastime of the wealthy, says Friedman. But the Knox Frictionless Ownership Platform is meant to provide any property investors with the ability to maximize returns and their rental property portfolio. The platform is supposed to be as easy and passive for investors as possible, sort of like working with a financial advisor.
And Friedman says they’ve found that property investment sees more returns than investing in the S&P 500. As part of the founders’ initial research, they ran the numbers of how much an average house in America would make on rent from 2008 to 2018 versus how much an investor would make from the S&P during that same time frame. According to Friedman, there was no competition. The property investment would’ve beat out the S&P 500 by almost 370%.
Knox isn’t like Zillow, Trulia or other popular rental listing sites. “It’s not a real estate search engine,” says Friedman. Instead, Knox is more comparable to firms like Goldman-Sachs or Merrill-Lynch in that they help build or grow an investment portfolio that includes real estate. Knox doesn’t charge property management fees, brokerage fees or any other kind of fees. It just takes 10% of a property’s rent payments.
Knox boasts it was recently included as part of the 2021 HousingWire Tech100 list for “creating solutions that make owning investment property as simple as owning a share of stock.”
The company has decided to expand to Phoenix because of the booming housing market and major potential to see big returns on income properties. “We believe in Phoenix,” says Friedman.
Knox has hired Thanh Vo to lead the company’s growth and expansion here. Before this, Vo worked as a project and operations manager for both Grubhub and Amazon.