Waco has more small multifamily than its size suggests. Baylor students fill fourplexes near campus, and the suburbs to the southwest are lined with 1980s duplexes that rent to families. Both can work with a DSCR loan if the tax line is budgeted honestly.
In short: LendingStreet finances Waco 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 with no stated maximum, purchases go up to 80% LTV, cash-out refinances up to 75% LTV, and the standard minimum DSCR is 1.0x. In Waco, property taxes at the full investor rate are usually the line that decides how much leverage a building can carry.
Near Baylor, the blocks between campus and downtown and the streets south and east of the university hold fourplexes, older houses split into units and small buildings designed for students. Many lease by the bedroom on academic-year terms and turn over each summer.
Hewitt and Woodway have streets of side-by-side duplexes built in the 1980s and 1990s, popular with families, hospital staff and young professionals. South Waco, Lake Air and neighborhoods off Bosque Boulevard and Valley Mills Drive add older duplexes and small fourplexes at lower prices. Robinson and Bellmead have scattered duplexes as well.
| Area | Typical stock | Tenants | What to check |
|---|---|---|---|
| Near Baylor | Fourplexes, split houses | Students, by the bedroom or unit | Lease terms, parking, summer vacancy |
| Hewitt | 1980s-90s side-by-side duplexes | Families, hospital staff | HOA rules, roof age, school zone |
| Woodway | Duplexes and some fourplexes | Professionals, families | Tax rate, condition |
| South Waco and Lake Air | Older duplexes and small buildings | Workforce households | Deferred maintenance, foundation |
| Robinson and Bellmead | Scattered duplexes | Workforce households | Appraisal comps, loan size |
Existing duplexes in two-family districts and fourplexes in multifamily districts are straightforward. Near Baylor, some houses have been divided over the years, and the legal unit count does not always match the number of doors. The appraiser and lender will look at what the city recognizes.
Check zoning with the City of Waco or the suburb, and confirm that each unit has its own entrance and, ideally, its own meter. Units added without permits usually do not count toward rent.
Student fourplexes can produce strong rent per square foot, especially within walking distance of campus, but they come with summer turnover, more wear and higher management time. Underwriting usually uses signed leases or a market rent estimate on a unit basis.
Hewitt and Woodway duplexes tend to lease on 12-month terms with steadier tenants and lower turnover. Rent per unit is lower than near campus, but expenses are often easier to predict.
If a building near Baylor is leased by the bedroom, keep a clear rent roll showing each lease, its term and the unit it belongs to. Vacant units can be counted at market rent on some programs, supported by the appraiser's rent schedule, but signed leases for the coming school year carry more weight.
This example is illustrative and not a quote. An investor buys a fourplex near Baylor for $520,000. Each unit leases for $1,100, $4,400 combined. Property taxes at the full rate are budgeted at $950 a month and insurance at $260.
At 75% LTV the loan is $390,000, with estimated principal and interest of about $2,595. The total payment is about $3,805 and the DSCR is about 1.16x.
A Hewitt duplex at $255,000 renting for $2,150 combined would carry a loan of $191,250 at 75% LTV, just above the $150,000 minimum. With taxes of $470 and insurance of $150, the total is about $1,892, for a DSCR of about 1.14x.
| Item | Baylor-area fourplex | Hewitt duplex |
|---|---|---|
| Price | $520,000 | $255,000 |
| Loan at 75% LTV | $390,000 | $191,250 |
| Estimated principal and interest | $2,595 | $1,272 |
| Taxes and insurance | $1,210 | $620 |
| Total monthly payment | $3,805 | $1,892 |
| Combined rent | $4,400 | $2,150 |
| DSCR | About 1.16x | About 1.14x |
Texas relies on property taxes, and investors do not get homestead exemptions. In the example, taxes take more than a fifth of the fourplex's rent. A building bought from an owner who lived in one unit may have carried a partial exemption, so the seller's bill can understate yours.
Look up the property on the McLennan County Appraisal District site and budget on the full combined rate of the city, county, school district and community college. Woodway, Hewitt and Waco each have different city rates, which changes the math on similar buildings.
Hail and wind are the main risks, and many policies carry percentage deductibles. Older duplexes may have original roofs, aging HVAC and foundation movement typical of Central Texas clay soils. A foundation report and roof inspection before you close can save surprises later.
Buildings near the Brazos River, the Bosque or local creeks may sit in flood zones. Check the FEMA map and get quotes early.
Shared systems are common in older fourplexes: one water meter, one water heater or a common laundry room. Separately metered units cost less to run and are easier to value, so note which utilities the owner pays when you build your budget.
Some Waco investors rent duplex units nightly to Silos and Baylor visitors. Non-owner-occupied short-term rentals in residential districts face added requirements in Waco, and suburban HOAs often prohibit rentals under 30 days. Most 2-4 unit loans here are underwritten on long-term leases. If you plan to switch a unit to nightly use later, treat that as possible upside rather than part of the qualifying rent.
Buildings with five to eight units near Baylor are common too. They fall under our 5-8 unit DSCR programs, where max LTV can be lower and varies by program. Owners of an existing duplex or fourplex can refinance up to 75% LTV with cash out, or up to 80% on rate-and-term on some programs, with seasoning that varies by program.
Texas has no state transfer tax on deeds, and title premiums are set by the state, which helps keep closing costs predictable on a refinance or purchase.
Send the address, price or current balance, rent roll and the appraisal district tax breakdown. The financing team will run the ratio and come back with options. Call (877) 298-1001 or use the form below. See also our Texas 2-4 unit page.
Yes. Fourplexes are residential and qualify on combined rent from signed leases or market rent.
Yes, if they are documented. Underwriting adds up the rent for each unit.
Texas property tax rates are high and investors get no homestead exemption.
Not if the loan is at least $150,000. Lower-priced duplexes can be combined in a blanket loan.
Possibly, but Waco adds requirements for non-owner-occupied STRs in residential zones, and HOAs may ban them.
That falls under our 5-8 unit DSCR programs.
No. Texas does not charge a state deed transfer tax.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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