Real Estate and Mortgage Insights with Garrett Knox on the Saint Louis Property Management Podcast

In this episode of the Saint Louis Property Management Podcast, Greg Abel talks with Garrett Knox of Knox Mortgage about navigating the world of real estate and mortgage lending. Garrett, with over 23 years of experience, shares valuable insights for homebuyers and investors alike, covering everything from mortgage rates to property investments.

Garrett’s journey into mortgages began unexpectedly while he was working in direct sales. A friend’s need for office space led to the idea of launching a mortgage company, and soon, Mid America Mortgage Consultants was born. From that small start in Valley Park, Missouri, Garrett’s business evolved, teaching him the importance of seizing opportunities and being adaptable in the real estate market.

The discussion turns to the advantages of working with a mortgage broker. After the 2008 financial crisis, brokers were seen in a negative light, and Garrett became a mortgage banker. However, he eventually returned to being a broker, which allows him to offer more competitive rates and options for clients by working with multiple lenders.

"As a broker, I have access to multiple lenders and can control my pricing, offering better deals than larger companies."

This flexibility makes it easier for Garrett to provide customized solutions, particularly for real estate investors.

Many clients find mortgage rates confusing, and Garrett helps break down how they are set. By explaining the difference between brokers and larger banks, he shows how brokers can keep margins lower, helping clients secure better rates. This transparency helps buyers understand the process and make smarter financial decisions.

In addition to his expertise in mortgage lending, Garrett has extensive experience in real estate investing, having flipped over 80 properties. While he initially focused on flipping, he has now shifted towards holding rental properties for long-term gains. He explains how current interest rates have made it harder to generate immediate cash flow, but focusing on appreciation and tax benefits makes holding properties a solid long-term strategy.

"You may not cash flow immediately, but appreciation and tax write-offs will pay off in the long run."

Garrett’s investment strategy has evolved with market conditions. Today, he is focused on acquiring rental properties in West County, targeting ranch homes in good school districts. This change reflects the reality of the current market, where holding onto properties and waiting for appreciation has become more attractive than flipping.

For new investors, Garrett highlights the need for a 20-25% down payment and explains how controlling his own pricing allows him to offer lower rates. He emphasizes the importance of patience and finding the right property to ensure long-term success.

"It’s tough for young investors, but with the right property and strategy, you can build wealth over time."

Garrett also discusses how rental income can be used to qualify for investment property loans. If an investor has a signed lease, lenders can use 75% of the lease income to help offset the mortgage payment, making it easier to qualify for financing.

Another valuable loan product Garrett highlights is the Debt Service Coverage Ratio (DSR) loan, which allows investors to qualify based on a property’s rental income rather than their personal income. If the rental income covers 125% of the mortgage payment, the investor can qualify for the loan. This is a popular option for experienced investors looking to expand their portfolios.

"With a DSR loan, as long as rental income covers 125% of the mortgage payment, you can qualify. It’s a great option for growing your investments."