Baton Rouge has a quiet supply of five to eight unit buildings: two-story brick apartments from the 1960s and 70s near LSU, old houses carved into units in Spanish Town and Beauregard Town, and small garden complexes off Government Street. They sit in a gap many lenders skip.
In short: LendingStreet offers DSCR loans on 5-8 unit residential buildings in Baton Rouge, qualifying on the combined rent of all units with no W-2s or tax returns. Loans start at $150,000 with no stated maximum and a 1.0x standard minimum DSCR, though maximum LTV on 5-8 unit properties is often lower than on a single-family home and varies by program. Buildings of 9 or more units are commercial.
Near LSU, the blocks around Tigerland, Lake Beau Pre and the Nicholson Drive corridor have small two-story buildings built for students and young workers. Downtown, Spanish Town and Beauregard Town have older houses that were split into apartments decades ago. Mid City, along Government Street and near the Baton Rouge General campus, has small courtyard complexes. Fewer of these buildings exist in the suburban parishes, where newer rentals tend to be single-family.
These buildings change hands less often than single-family homes, and many are sold off-market by long-time local owners. When one comes up, being ready to close matters.
The building qualifies on the combined rent of all units, measured against the full monthly payment: principal and interest, property taxes, insurance, flood coverage and any HOA. Underwriting typically uses current leases or the appraiser's market rents, whichever the program specifies.
Expect closer review than on a single house. Appraisers use small-income-property methods and look for comparable sales of similar buildings, which are limited in Baton Rouge. Leverage varies by program, and a lower LTV than on a one-unit rental is normal.
If one unit is vacant or rented well below market, the appraiser's market rent may be used for that unit on some programs. Ask before you assume it will.
| Item | 1-4 units | 5-8 units |
|---|---|---|
| Qualifies on | Rent of all units | Rent of all units |
| Standard minimum DSCR | 1.0x | 1.0x |
| Max LTV | Up to 80% purchase | Often lower; varies by program |
| Appraisal comps | Plentiful in most areas | Fewer local sales |
| Insurance | Landlord policy | Often a small commercial-style policy |
On an older multi-unit building in south Louisiana, insurance can run several times what a single-family policy costs. Carriers look at roof age, wiring, plumbing, fire separation between units and wind exposure. Some will only write buildings with updated systems. A flood policy on a building in a mapped zone adds more.
Get a real quote before you make an offer, and get it for the building as it is, not as you plan to renovate it.
This example is illustrative and not a quote. An investor buys a six-unit brick building near campus for $640,000. Each unit rents for $975, for gross rent of $5,850 a month. Taxes are budgeted at $590 a month, insurance at $1,050 and flood coverage at $160.
At 75% LTV, the loan is $480,000 with estimated principal and interest of about $3,356. The total payment is near $5,156, for a DSCR of about 1.13x. At 70% LTV, the loan is $448,000, the payment is about $4,932 and the ratio is about 1.19x.
Notice how much of the payment is insurance. On this building the premium is larger than the tax bill, which is common for older multi-unit property in south Louisiana. A building with a newer roof and updated wiring can quote meaningfully lower, and that improvement shows up directly in the ratio and the loan amount you can carry.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $480,000 | $448,000 |
| Estimated principal and interest | $3,356 | $3,132 |
| Taxes, insurance, flood | $1,800 | $1,800 |
| Total payment | $5,156 | $4,932 |
| DSCR at $5,850 gross rent | 1.13x | 1.19x |
Buildings near LSU lease on the school calendar. A rent roll that looks full in October can show vacancies in June. Underwriting looks at leases and market rent, but plan your reserves for summer turnover, make-ready costs between tenants and the occasional unit that sits empty into the fall.
Graduate students, hospital staff and young professionals working downtown tend to sign full-year leases, which can smooth out the seasonal pattern compared with buildings that rent mostly to undergraduates.
Many of these buildings are 50 or more years old. Before you buy, have an inspector look at the roof, the electrical service and whether units are separately metered, the plumbing, signs of termite damage and drainage around the foundation. Those findings shape your insurance quote, your repair reserve and, in turn, the ratio.
Fire separation between units, smoke detectors and egress windows also come up in insurance inspections. Fixing them before you shop coverage can lower the premium.
Investors who build a portfolio of small buildings near campus often move to a blanket portfolio loan once they own five or more properties, combining them under one loan qualified on overall cash flow. If you are looking at nine units or more, see our multifamily loans page.
A blanket loan can also release a building when you sell it, so the rest of the portfolio stays in place.
On a small apartment building, the DSCR payment includes principal, interest, taxes, insurance and flood coverage, but your real costs go further. Who pays water and sewer, whether units have their own electric meters, trash service, lawn care and a property manager all affect what the building actually earns.
Underwriting focuses on rent against the payment, but appraisers look at the full income and expense picture when they value a 5-8 unit building. Clean records help: twelve months of rent deposits, utility bills and a current rent roll that matches the leases. In older Baton Rouge buildings where the owner has managed informally, putting those records together before you list or refinance can make a real difference to value.
LendingStreet finances small residential buildings across Baton Rouge and Louisiana. Our investor loans are business-purpose loans on non-owner-occupied property. Send the rent roll, leases, expenses and insurance quote through the form below.
For our programs, 1-8 units is residential. Buildings with 9 or more units are commercial.
It varies by program and is often lower than on a single-family rental.
Yes. Provide the rent roll and current leases for every unit.
Underwriting uses the leases or market rent, but you should hold reserves for seasonal turnover.
Yes. LLC borrowers are standard.
Many 5-8 unit buildings are insured on a small commercial-style policy. The premium counts in the DSCR.
With five or more properties, a blanket portfolio loan may fit.
On some programs, yes. The appraiser's market rent can be used for a vacant unit, but leases are preferred for occupied units.
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