Mobile's small multifamily stock ranges from 1920s Midtown duplexes with tall ceilings and wood floors to 1970s brick fourplexes off Airport Boulevard. Both can carry a DSCR loan comfortably, because prices here are modest relative to rents.
In short: LendingStreet finances Mobile duplexes, triplexes and fourplexes with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000, purchases go up to 80% LTV and the standard minimum DSCR is 1.0x. Mobile's low property taxes help the ratio; wind insurance and older building systems are the costs to watch.
Older duplexes and converted houses are common in Midtown, Crichton, Leinkauf, the Old Dauphin Way area and the neighborhoods around Government Street and Old Shell Road. Many were built before World War II, raised a few feet off the ground with wood siding and porches. Some historic districts downtown include two-family Creole cottages.
Brick fourplexes and side-by-side duplexes from the 1960s to the 1980s are spread through West Mobile, along the Airport Boulevard and Cottage Hill corridors, and near the University of South Alabama. Tillman's Corner and Theodore have some newer duplexes on larger lots.
| Area | Typical 2-4 unit stock | Watch for |
|---|---|---|
| Midtown, Crichton, Old Dauphin Way | Pre-1940 duplexes and converted homes | Wiring, plumbing, piers, historic district review |
| West Mobile, Cottage Hill | 1960s-1980s brick fourplexes and duplexes | Roof age, HVAC, drainage |
| Near South Alabama campus | Duplexes and fourplexes rented to students and staff | Lease cycles, turnover |
| Tillman's Corner, Theodore | Newer duplexes on larger lots | Flood zone, septic outside sewer areas |
The City of Mobile's zoning determines where two-family and multi-family buildings are allowed. Many older duplexes were built before current zoning and continue as legal nonconforming uses, which can limit rebuilding after major damage. Ask the city for a zoning verification letter on older properties, and check how a rebuild after a storm would be treated.
In the historic districts, exterior changes usually need review by the city's historic development commission. Plan renovations accordingly.
Converting a large old house into two or three units, or adding a unit to an existing duplex, usually needs zoning approval and building permits. Rent from units that were added without permits may not be counted when the loan is sized, and it can create insurance problems after a claim. Ask the seller for permit records on any conversion.
This example is illustrative and not a quote. Investor A buys a 1920s Midtown duplex for $245,000, with two units renting for $1,100 each. Investor B buys a 1970s brick fourplex in West Mobile for $360,000, with four units at $925 each.
At 75% LTV the duplex loan is $183,750, with estimated principal and interest of about $1,253. With $245 in taxes and $260 for insurance, the payment is about $1,758 and DSCR is about 1.25x. The fourplex loan at 75% is $270,000, with estimated principal and interest of about $1,842. With $360 in taxes and $380 for insurance, the payment is about $2,582 and DSCR is about 1.43x.
| Item | Midtown duplex | West Mobile fourplex |
|---|---|---|
| Purchase price | $245,000 | $360,000 |
| Loan amount (75% LTV) | $183,750 | $270,000 |
| Estimated principal and interest | $1,253 | $1,842 |
| Taxes and insurance | $505 | $740 |
| Total monthly payment | $1,758 | $2,582 |
| Combined monthly rent | $2,200 | $3,700 |
| DSCR | 1.25x | 1.43x |
Alabama taxes rental property at a 20% assessment ratio, twice the 10% assessment ratio for an owner's home. Because so many Mobile duplexes were once partly owner-occupied, the seller's bill may reflect the lower class. Budget on the rental classification using the Mobile County revenue commission's records.
Even after reclassification, Mobile County tax bills are low compared with most of the country, which is one reason 2-4 unit ratios here are often comfortable.
Insurance usually costs more than taxes on a Mobile 2-4 unit property. Carriers price wind risk by location, roof age and construction, and buildings south of I-10 or near the bay, Dog River or Three Mile Creek cost more to insure. Properties in FEMA flood zones generally need flood insurance.
Older Midtown buildings may have original wiring, cast iron drains or pier foundations that need attention. A FORTIFIED roof can earn wind discounts from Alabama insurers, and a roof replacement is often the best long-term investment in an older duplex.
Mobile duplex and fourplex tenants include hospital staff at USA Health, Mobile Infirmary and Providence, students and staff at the University of South Alabama and Spring Hill College, and workers at Airbus, Austal and the Port of Mobile. Units with central air, updated kitchens and off-street parking lease fastest.
Alabama landlord-tenant law sets the basic rules for deposits, notices and evictions statewide. If a building has below-market leases, the loan is usually sized on rents in place, so a bridge loan followed by a DSCR refinance can work better on a value-add deal.
Small apartment buildings with 5 to 8 units in West Mobile and Midtown can be financed with a residential DSCR loan, though max LTV can be lower and varies by program. See our 5-8 unit page for Mobile. If you own five or more rentals, a blanket portfolio loan can combine them under one payment.
Some Mobile duplexes sell for less than $200,000, which means a 75% loan could fall below the $150,000 minimum. In that case, consider a fourplex, a higher-leverage purchase within program limits, or combining properties into a blanket loan.
Another option is to buy the lower-priced building with cash or a short-term loan, renovate it, and then refinance it together with other rentals once you own five or more. Cash-out seasoning rules vary by program, so check timing before you plan around a refinance.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price and rents through the form below, or call (877) 298-1001.
Yes. The loan qualifies on the combined rent of both units, with no W-2s or tax returns. Purchases go up to 80% LTV.
Alabama assesses rental property at a 20% assessment ratio, double the residential homestead ratio, so bills often rise when an owner-occupied building becomes a rental.
If the property is in a FEMA flood zone, flood insurance is generally required. Get a flood determination early.
Consider combining properties into a blanket portfolio loan or choosing a larger building. The minimum loan amount is $150,000.
Yes. Cash-out goes up to 75% LTV, and the combined rent must still clear the program minimum.
Not special, but expect questions about roof, wiring, foundation and any historic district limits on exterior work.
The minimum credit score is 620.
Yes. Student and staff rentals near campus qualify like any other 1-4 unit rental. Bring current leases and note when they end, since many turn over at the start of the school year.
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