Tucson built a lot of small apartment buildings between the 1950s and the 1980s: single-story block fourplexes around a shared courtyard in midtown, duplexes on the streets between the university and Broadway, and properties with a main house and a casita or two behind it. They are the backbone of the city's small multifamily market.
In short: LendingStreet finances Tucson duplexes, triplexes and fourplexes with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000, purchases go up to 80% LTV and cash-out up to 75% LTV, with a standard 1.0x minimum DSCR, 620 minimum credit score and LLC borrowers allowed. Our investor loans are business-purpose loans on non-owner-occupied property.
Midtown, roughly between Grant Road and 22nd Street and from Campbell Avenue east past Swan Road, has the largest concentration of block duplexes and fourplexes, many built in the 1960s and 1970s. Near the University of Arizona, Jefferson Park, Feldman's, West University and Rincon Heights have duplexes and older homes divided into units, most leased to students. Blenman-Elm and Miramonte mix single-family homes with small multifamily.
On the south and west sides, duplexes and triplexes are more affordable. Newer side-by-side duplexes are less common in Tucson than in many cities, so most of what you will see is older construction.
Outside the city limits, Pima County, Oro Valley and Marana each have their own zoning, and small multifamily there is scarcer. Some investors in those areas instead buy single-family homes with a permitted guest house. Check which jurisdiction controls the parcel before you rely on anyone else's rules.
Many Tucson lots have a main house plus a casita or guest house. Whether that counts as a second legal unit depends on zoning and permits. Tucson allows accessory units in many zones, but older casitas were sometimes built or converted without approval. An appraiser will only give rent credit to a legal unit, and the loan type depends on the legal unit count, so confirm with the city and the Pima County Assessor before you buy.
After years of debate over large student rentals near campus, Tucson tightened rules on group dwellings in the neighborhoods around the university. If you are buying near the UA, confirm what occupancy and use the zoning allows, and do not underwrite rent that depends on more tenants per unit than the rules permit.
This example is illustrative and not a quote. An investor buys a 1960s block fourplex in midtown for $640,000 with 25% down. Each two-bedroom unit rents for $1,150, or $4,600 a month.
Estimated principal and interest on a loan of $480,000 is about $3,274. With taxes of $300 and insurance of $250, the total payment is about $3,824, and the DSCR is about 1.20x.
Water, sewer and trash on a building like this are often paid by the owner, in this example about $350 a month. The DSCR calculation focuses on principal, interest, taxes, insurance and HOA dues, so the ratio looks the same either way, but that bill comes out of your cash flow. Ask the seller for twelve months of utility bills.
| Item | Monthly |
|---|---|
| Rent, 4 units | $4,600 |
| Estimated principal and interest | $3,274 |
| Property taxes | $300 |
| Insurance | $250 |
| Total payment used for DSCR | $3,824 |
| DSCR | 1.20x |
| Owner-paid water, sewer, trash (not in DSCR) | $350 |
Tucson rents for small multifamily units are moderate compared with Phoenix, but so are prices, and the ratio often works at normal leverage. Midtown fourplexes lease to a mix of hospital staff from Banner-University Medical Center and Tucson Medical Center, university employees and service workers. Units near campus turn over each summer. Homes near Davis-Monthan Air Force Base attract military tenants who often move on set schedules. Use the appraiser's rent schedule, which shows market rent for each unit.
Many older fourplexes still use evaporative coolers, which work in the dry months but struggle during the monsoon. Tenants increasingly expect refrigerated air, and insurers and appraisers will ask about roof age, especially on flat roofs common in Tucson. Budget for replacements and expect them to come up in inspections.
Block construction holds up well in the desert, but older buildings often have original plumbing, galvanized supply lines and electrical panels that insurers flag. A pre-purchase inspection that covers the roof, cooling, plumbing and electrical gives you numbers to negotiate with and helps you plan the first few years of capital spending.
Arizona caps annual growth in limited property value at 5%, and there is no real estate transfer tax. Arizona requires residential rentals to be registered with the county assessor, so register the building in your LLC's name after closing. Insurance is moderate, though properties near washes may need flood coverage.
Because taxes and insurance are a smaller share of the payment in Tucson than in high-tax states, the loan amount does most of the work in the ratio. That is why rent levels and leverage, more than carrying costs, usually decide whether a Tucson building clears 1.0x.
Buildings of five to eight units are still residential for us, and midtown has many of them. See our Tucson 5-8 unit page, since max LTV can be lower on those buildings and varies by program.
Send the address, price, rent roll and utility history through the form below, or call (877) 298-1001. We will tell you what leverage the building supports and whether a casita or extra unit counts. Our Arizona 2-4 unit page covers Phoenix, Mesa and Flagstaff buildings as well.
Yes. It qualifies on the combined rent of all four units.
Only if it is a legal unit under zoning and permits. Confirm with the city or county and the assessor before you buy, because an unpermitted casita usually gets no rent credit.
Tucson has tightened rules on group dwellings near campus. Check what the zoning allows.
The ratio focuses on principal, interest, taxes, insurance and HOA dues, but owner-paid utilities still reduce cash flow.
Purchases go up to 80% LTV, so at least 20%. Many Tucson fourplex buyers choose 25% to leave a cushion for roof and cooling work in older buildings.
Arizona requires residential rental property to be registered with the county assessor.
Yes. LLC borrowers are standard, and you sign for the loan personally.
Yes. Cash-out goes up to 75% LTV after seasoning, which varies by program, and rate-and-term up to 80% on some programs. Bring current leases and twelve months of utility bills.
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