Bangor's small apartment buildings are mostly big old houses and brick blocks near downtown, the Kenduskeag Stream and the hospital district. Five to eight units under one roof can produce strong rent, but they also share one roof, one heating plant and one winter.
In short: LendingStreet finances 5-8 unit residential buildings in Bangor and nearby towns with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Maximum LTV on 5-8 units is often lower than on 1-4 units and varies by program.
Most five- to eight-unit buildings in Bangor were not built as apartments. Large nineteenth-century homes on and near Broadway, Union Street and the West Side were divided into units over the decades. Downtown, a few brick buildings hold apartments above or beside commercial space. Brewer and Old Town have smaller numbers of similar buildings.
Tenants include hospital staff, Husson and University of Maine students, and workers across the region's service economy. Demand has been steady, but older buildings demand active management.
Buildings like these change hands less often than single-family homes or duplexes, and many are owned by longtime local landlords. When one does come up for sale, it often draws interest from several investors, and being able to show financing that fits a five- to eight-unit building can make your offer stronger.
Our DSCR programs treat 1-8 units as residential, so a six-unit Bangor building is underwritten on rent much like a duplex, without a full commercial package. Because these buildings are valued largely on income and trade less often, maximum LTV can be lower and reserve requirements higher. Nine or more units is commercial or multifamily lending. Mixed-use buildings with storefronts may fall outside residential programs; ask before you write an offer.
This example is illustrative and not a quote. An investor buys a six-unit building near downtown Bangor for $600,000. Each unit rents for about $1,050, for combined rent of $6,300 a month. Taxes are about $1,000 a month and insurance about $450.
At 75% LTV the loan is $450,000, the full payment about $4,520 and the DSCR about 1.39x. At 70% LTV the loan is $420,000, the payment about $4,315 and the ratio about 1.46x. The building has one oil boiler, and the landlord pays about $8,400 a year in heat, which sits outside the ratio but comes out of cash flow.
The example shows why heat deserves attention on top of the ratio. At $8,400 a year, the boiler costs about $700 a month on average, much more in winter, and that comes straight out of the cash flow left after the loan payment. Factor it into the price you offer.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $450,000 | $420,000 |
| Estimated principal and interest | $3,070 | $2,865 |
| Taxes and insurance | $1,450 | $1,450 |
| Total monthly payment | $4,520 | $4,315 |
| DSCR at $6,300 rent | 1.39x | 1.46x |
A central boiler is efficient to maintain but puts the whole building's heat bill on the owner. Ask for at least two years of fuel deliveries, the boiler's age and service records and the condition of the oil tank. Some owners convert to individual heat pumps so tenants pay for their own heat, which can improve cash flow and value. Hot water, common lighting, snow removal and trash are other costs that often fall on the landlord.
Look closely at the oil tank too. Older tanks in basements can need replacement, and insurers sometimes ask about their age and condition. If you plan to convert to heat pumps, get quotes before closing so the cost is part of your plan rather than a surprise.
A building with five or more units faces closer code and insurance scrutiny. Check:
Six units means six sets of tenants who need a plowed driveway, clear walks and a roof that does not leak when snow melts. Budget for snow removal contracts and roof raking, and check for ice dam damage on the top floor before you buy. Insurers may ask about frozen pipe history and how the building is heated.
Parking is the other winter issue in Bangor's older neighborhoods. Six units can mean eight or more cars, and city winter parking rules and limited off-street space make snow removal harder. Ask the seller how plowing is handled now, what it costs and whether tenants have had problems, and include that cost in your budget. Good snow removal keeps tenants happy and reduces slip-and-fall liability, which insurers care about on multi-unit buildings.
Appraisers use both comparable sales and an income approach. Five- to eight-unit sales are infrequent in greater Bangor, so comps may come from other Maine cities. A clean rent roll, current leases and a trailing operating statement help support the value.
Expect the appraiser to ask about vacancy history, turnover and any recent capital work. Records of a new roof, an updated boiler or rewiring support the condition rating, which in turn supports value.
Maine's real estate transfer tax is $2.20 per $500 of value, split equally between buyer and seller. On a $600,000 purchase each side pays about $1,320. Bangor's municipal tax bill on a multi-unit building can be significant; use the current bill and confirm whether a revaluation is planned.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll, heat arrangement and expenses through the form below. For other Maine buildings, see our Maine 5-8 unit page.
Under our DSCR programs, 1-8 units is residential. Nine or more units is commercial or multifamily lending.
It varies by program and is often lower than on 1-4 units.
Not directly. The ratio uses principal, interest, taxes, insurance and dues. But heat costs reduce your cash flow.
Mixed-use buildings may not fit residential programs. Tell us the layout and we will tell you which program fits.
We total the rent of all units, using leases or market rent for vacant units.
Yes. Rate-and-term and cash-out refinances are available, with leverage set by program.
The appraisal includes an income approach. A rent roll and operating statement help.
Yes. LLC borrowers are standard, and you sign for the loan personally.
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