Bismarck and Mandan have a solid supply of small apartment buildings, many built during the energy booms of the late 1970s and early 1980s. They trade quietly between local owners and offer more rent per closing than a duplex.
In short: LendingStreet finances 5 to 8 unit residential buildings in Bismarck, Mandan and Lincoln with DSCR loans that qualify on the combined rent of all units. 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 unit properties can be lower than on 1-4 units and varies by program.
Many Bismarck and Mandan five- to eight-unit buildings date from the 1970s and early 1980s, when energy activity drove a wave of apartment construction. Typical buildings are two-story walk-ups or split-entry designs with six or eight one- and two-bedroom units, shared laundry and surface parking, often with detached garages.
Newer five- to eight-unit buildings, often townhome-style with attached garages, are found in north Bismarck and Lincoln. They rent for more per unit, cost less to maintain and often carry larger special assessments.
These older buildings were built to similar plans, so their strengths and weaknesses are well known: simple layouts and good parking, but aging boilers, original windows and parking lots that need resurfacing after decades of freeze and thaw. A local property manager's view of a building is worth getting before you buy.
Five to eight units still qualify as residential property. The loan is approved on combined rent, with no tax returns, and 30-year terms are available. Buildings with nine or more units are commercial; see our multifamily loans page for those.
Staying under nine units also keeps the appraisal and closing simpler. Bismarck owners who have outgrown duplexes often find a six-plex is the largest step they can take while keeping the same loan type and documents they already know.
This example is illustrative and not a quote. An investor buys a 1980s six-plex in south Bismarck for $585,000. Units lease for an average of $875, so rent is $5,250 a month. Taxes are budgeted at $800 a month and insurance at $330.
At 70% LTV the loan is $409,500. Estimated principal and interest on a 30-year term is about $2,863, the full payment is about $3,993 and DSCR is about 1.31x. That cushion helps cover costs the DSCR does not include, such as owner-paid heat, water and snow removal.
If the seller's rents are below market, the ratio at purchase may be lower than it will be after renewals. Run the numbers on today's rents for the loan, and on market rents for your own plan.
| Item | Amount |
|---|---|
| Purchase price | $585,000 |
| Loan at 70% LTV | $409,500 |
| Estimated principal and interest | $2,863 |
| Taxes | $800 |
| Insurance | $330 |
| Total payment | $3,993 |
| Rent, six units | $5,250 |
| DSCR | 1.31x |
Max LTV on 5-8 unit buildings can be lower than on one- to four-unit properties and varies by program. Expect higher reserve requirements. Some programs count market rent on vacant units, but appraisers look at the full rent roll and local vacancy.
Appraisers often use both sales of similar buildings and an income approach on five- to eight-unit properties. A clean rent roll and operating history support both the value and the ratio.
Your management plan matters as well. If you will self-manage from out of town, explain who handles snow, repairs and showings. A local manager with a record on similar Bismarck buildings makes the file stronger.
DSCR includes the loan payment, taxes, insurance and any dues. It does not include utilities, snow removal, maintenance, laundry upkeep or management. In older Bismarck buildings the owner often pays for a shared boiler and water. Ask for two years of operating statements.
Converting a shared boiler to individual furnaces or adding water submeters is a common upgrade plan in older Bismarck walk-ups. Price it as its own project with contractor quotes, and treat the savings as future upside rather than part of today's math.
Many small buildings in Bismarck and Mandan have been owned by the same local investor for decades. Rents may be below market, leases informal and records thin. Ask for a written rent roll, signed leases and deposit records. Below-market rents can be an opportunity, but the DSCR uses what the building produces or supports now.
If the building needs work before it qualifies, a bridge loan can buy it, and a DSCR loan can replace the bridge once rents are raised and units leased.
A written estoppel from each tenant, confirming rent, deposit and lease dates, protects you from surprises after closing and gives the appraiser clean data.
Some older buildings in south Bismarck and Mandan sit near the Missouri or Heart rivers. Check the flood zone and price flood coverage if required. Hail is the bigger insurance issue for most buildings, so ask about the roof, the deductible and replacement cost coverage.
Older flat or low-slope roofs on small apartment buildings are expensive to replace after a hail storm. Ask for the roof's age, any claim history and whether the policy pays replacement cost or actual cash value.
Once you own several small buildings and rentals, a blanket portfolio loan can combine them under one payment. Many Bismarck investors work up from duplexes to six- and eight-plexes; a residential DSCR loan keeps that path simple until you are ready for nine or more units.
Some owners also refinance a group of small buildings together when several bank loans come up for renewal, which reduces the number of maturity dates to track.
Send the rent roll, operating statements, price and address. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below.
If the building needs work first, mention it. We can show how a bridge loan now and a DSCR refinance later would compare with buying on a DSCR loan today.
Yes. Properties with 1-8 units qualify for residential DSCR loans.
Nine or more units is commercial. See our multifamily loans page.
Max LTV on 5-8 unit buildings can be lower than on 1-4 units and varies by program.
Some programs use market rent for vacant units; signed leases carry the most weight.
Not directly, but it affects your cash flow. Budget for it.
It may, if documented and typical for the market.
No. The loan qualifies on combined rent, credit and reserves.
Yes. LLC borrowers are standard.
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