Topeka has not seen the building boom of Kansas City's suburbs, and that is part of the opportunity. Newer rental housing is relatively scarce, so a well-built duplex or fourplex in southwest Topeka or near Washburn University can stand out against a rental stock that is mostly decades old.
In short: LendingStreet finances ground-up construction of 1-8 unit investment properties in Topeka and Shawnee County, including spec homes, build-to-rent houses, infill duplexes and fourplexes, and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through a draw schedule after inspections. Plans, permits, a realistic budget and an experienced builder are what get a project approved.
Southwest Topeka and the Auburn-Washburn area see most of the new single-family construction, with spec homes aimed at families who want the Washburn Rural schools. Build-to-rent duplexes and fourplexes work on infill lots in central Topeka and near Washburn University, where tenants value newer units close to campus and downtown.
Outlying towns like Silver Lake, Rossville and Tecumseh offer cheaper land, though rents and resale values there need to support the build cost. Small 5-8 unit buildings need the right zoning and usually sit near major roads or employment.
Rents for newer two- and three-bedroom units in Topeka usually run above rents for older apartments, because tenants pay for central air, in-unit laundry, modern kitchens and off-street parking. That premium is what makes build-to-rent work here, but it must be tested against a full tax bill on the finished value.
Ask local property managers what new units are actually leasing for, not what they are listed for. In a market with relatively little new rental housing, a realistic rent estimate is the foundation of the whole project.
We size construction loans on loan-to-cost, which combines land, hard costs and soft costs. The percentage is set per project based on your experience, your builder and the plan. Funds are released through draws, each one after an inspection confirms the work. Interest accrues only on what has been drawn.
Our draw schedule calculator can help you plan how much you will draw each month and what the interest carry will look like.
Build a contingency into the budget from the start. Lenders and inspectors expect a reserve for price changes and surprises, and a budget with no cushion often runs short right before the final draw.
| Phase | Work completed before the draw |
|---|---|
| Foundation | Excavation, footings, slab or basement walls |
| Framing | Walls, roof structure, sheathing, windows |
| Rough-in | Plumbing, electrical, HVAC rough |
| Close-in | Insulation, drywall, roofing, siding |
| Finish | Cabinets, flooring, fixtures, final inspection |
This example is illustrative and not a quote. An investor builds a two-story fourplex with two-bedroom units on an infill lot near Washburn University. Land costs $55,000, hard costs $640,000 and soft costs $45,000, for a total of $740,000. A loan sized at 80% of cost for this example is $592,000.
Over an eleven-month build with an average of about 55% of the loan drawn, interest carry is about $31,339. The finished fourplex appraises at $820,000 and leases at $1,400 per unit. A 75% DSCR refinance of $615,000 pays off the construction loan. Estimated principal and interest is about $4,195; with taxes of $950 and insurance of $330, the payment is about $5,475 and the DSCR is about 1.02x.
Storms shape construction choices here. Impact-resistant roofing, well-anchored framing and a safe interior space or storm shelter are features tenants and buyers in tornado country notice, and some can lower insurance costs. Check with the local building department for current code requirements, which are updated over time.
Expansive clay soils in parts of northeast Kansas affect foundation design. A soils report and an engineered foundation plan protect the project from cracking and settling later.
Winter weather also slows concrete and exterior work in northeast Kansas, and spring storms can delay roofing. Most builders aim to have the structure closed in before the coldest months so interior trades can keep working.
The City of Topeka handles building permits and zoning inside the city, while Shawnee County and the smaller cities handle their own areas. Duplexes and fourplexes need zoning that allows them. Utility connections, sidewalks and any required street improvements can add cost on an infill lot, so get the full fee picture from the city before you close on land.
Projects without plans or permits, or a borrower with no build track record and no experienced general contractor, usually do not qualify.
Before buying an infill lot, a short meeting with city planning staff can reveal setbacks, easements, alley access rules or utility limits that change what can be built. That conversation costs nothing and can save a redesign.
We look for a project that is ready to start and has a clear finish line.
Change orders deserve attention too. If you upgrade finishes or adjust the floor plan mid-build, document the change, its cost and how it will be paid, because the draw schedule is based on the approved budget.
Spec builders repay the loan from the sale. Build-to-rent investors refinance into a DSCR loan once the property is leased. Remember that Shawnee County reappraises every year and new construction is valued at its finished value, so budget a full tax bill at the 11.5% assessment ratio when you run the refinance numbers. Our construction-to-DSCR guide explains the steps.
Run the refinance math before you break ground. If the finished rent will not cover a DSCR payment at a realistic leverage, adjust the plan, the unit mix or the budget now rather than after the building is up.
Send the lot address, plans, budget and builder details. Call (877) 298-1001 or use the form below to get a quote.
Spec homes, build-to-rent houses, infill duplexes and fourplexes, and small 5-8 unit residential buildings.
On loan-to-cost, with terms set per project.
In draws after inspections confirm completed work.
Without your own track record, an experienced general contractor is usually required.
Yes, where zoning allows. Infill duplexes and fourplexes near campus are a common build-to-rent project.
Yes. We finance 1-8 unit investor construction throughout Shawnee County.
Sell the property or refinance into a DSCR loan based on the rent.
They are worth considering. Impact-resistant roofing and a safe interior space appeal to tenants and buyers and can help with insurance.
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