On the Charleston peninsula, a 2-4 unit building is often a historic single house divided into flats. In North Charleston, it is more likely a block fourplex from the 1960s or 1970s. The two finance very differently.
In short: LendingStreet finances Charleston-area duplexes, triplexes and fourplexes with DSCR loans that qualify on combined rent from every unit, with no W-2s or tax returns required. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, cash-out refinances up to 75% LTV, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Because South Carolina taxes rentals at a 6% assessment ratio, high-priced peninsula buildings often need lower leverage, while North Charleston fourplexes usually cash flow at standard leverage.
The peninsula has a long tradition of multi-unit living in historic houses. Charleston single houses, one room wide and set sideways to the street with long piazzas, were often divided into two or three apartments, and similar conversions are common in Wagener Terrace, Hampton Park, North Central, Cannonborough, Elliotborough and the Eastside. These buildings rent well to students at the College of Charleston and the Medical University of South Carolina and to downtown workers, but prices are high relative to rent.
North Charleston, Park Circle, parts of West Ashley and James Island have purpose-built duplexes and small brick or block fourplexes from the mid-20th century, at prices that line up much better with workforce rents.
The City of Charleston's zoning code controls how many units a lot may hold, and work on exteriors in the historic districts usually needs Board of Architectural Review approval. A peninsula building with three apartments must be a legal three-unit use for the appraiser to count all three rents, so check the zoning and any certificates of occupancy before you count on that income. North Charleston and Charleston County have their own codes for buildings outside city limits.
This example is illustrative and not a quote. An investor buys a block fourplex near Park Circle for $720,000. Each unit rents for $1,550, so combined rent is $6,200. With 25% down the loan is $540,000. Estimated principal and interest is about $3,684, taxes at the 6% assessment ratio about $790 and insurance about $420, for a total of about $4,894 and a DSCR of about 1.27x.
A peninsula duplex at $850,000 renting for $5,200 combined tells a different story. At 75% LTV the total payment is about $5,674 and the DSCR is about 0.92x, below 1.0x. At 65% LTV the payment drops to about $5,094 and the DSCR is about 1.02x.
| Item | Park Circle fourplex, 75% | Peninsula duplex, 75% | Peninsula duplex, 65% |
|---|---|---|---|
| Loan | $540,000 | $637,500 | $552,500 |
| Combined rent | $6,200 | $5,200 | $5,200 |
| Estimated principal and interest | $3,684 | $4,349 | $3,769 |
| Taxes and insurance | $1,210 | $1,325 | $1,325 |
| Total payment | $4,894 | $5,674 | $5,094 |
| DSCR | About 1.27x | About 0.92x | About 1.02x |
South Carolina taxes a legal residence at a 4% assessment ratio and rentals at 6%, and investors do not receive the school operating millage relief owner-occupants get. When the seller lived in one of the units, the current tax bill may reflect a partial owner-occupied assessment. Recalculate at 6% for the full building, using the millage for that tax district.
The difference is large enough to change your offer. On a building where the seller lived in one unit and rented the others, the tax bill can jump after the sale once the county reclassifies the whole property. Call the Charleston County Assessor or Auditor with the parcel number, ask how the property is currently classified, and budget on the 6% figure from the first month. South Carolina also charges deed recording fees based on the sale price, which show up on the closing statement.
Much of the peninsula and parts of North Charleston and James Island lie in flood zones, and wind insurance on the coast is expensive. Older multi-unit buildings may also have knob-and-tube wiring, older plumbing and termite history. Get the flood determination, an elevation certificate if available, and wind and flood quotes during your due diligence period, and include them in the ratio.
Peninsula units draw College of Charleston and MUSC students, residents and staff, plus downtown hospitality and office workers. North Charleston units rent to workers at the port, Joint Base Charleston, Boeing and the region's manufacturers and distribution centers. Near the colleges, leases may follow the academic year, so have the next year's leases in hand when you apply.
Parking is a real factor on the peninsula, where many historic buildings have little or no off-street parking. Units with a dedicated space, a piazza and in-unit laundry rent faster and hold tenants longer. In North Charleston, tenants care more about commute times to the port, the base and the Boeing campus, so buildings close to I-26 and I-526 tend to lease quickly.
Some peninsula buildings and North Charleston apartment buildings have five to eight units. These are still residential under our programs, but max LTV can be lower depending on the program. Our Charleston 5-8 unit page covers that step, and the blanket portfolio page covers combining several duplexes under one loan.
Our investor loans are business-purpose loans on non-owner-occupied property, so none of the units can be your home. Send the address, price, rent by unit, tax estimate at 6% and insurance quotes. LendingStreet will run the ratio at a few leverage levels and send options. Call (877) 298-1001 or use the form below. The South Carolina 2-4 unit page covers the rest of the state.
Yes, if the units are legal under city zoning. The loan qualifies on combined rent from all units.
High prices, the 6% assessment ratio for rentals and coastal insurance make the payment heavy relative to rent. Lower leverage often solves it.
Often, yes. Prices are lower relative to rent, so standard leverage is more likely to clear 1.0x.
Not to buy, but exterior work in the historic districts usually needs Board of Architectural Review approval, which affects renovation plans and timing.
Purchases go up to 80% LTV and cash-out up to 75% LTV, subject to the combined rent covering the payment.
No. DSCR loans qualify on property rent. You need a 620 or higher credit score and reserves.
Yes. Cash-out goes up to 75% LTV, and seasoning varies by program.
No. Our loans are business-purpose loans on non-owner-occupied property.
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