Colorado's 5 to 8 unit buildings range from 1920s brick walk-ups in Denver to 1970s buildings in Colorado Springs and Fort Collins. Rents are strong, but so are prices, and hail insurance and newer tenant laws need to be in the underwriting from day one.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Colorado with DSCR loans that qualify on the building's rent, starting at $150,000 with no stated maximum and LLC borrowers standard. Purchases can go up to 80% LTV and cash-out up to 75%, though maximum leverage on 5-8 units varies by program. In Colorado, hail-driven insurance premiums, Denver rental licensing and the state's newer for-cause eviction rules are the items to check alongside the rent roll.
Denver has a large stock of older brick apartment buildings in Capitol Hill, Cheesman Park, Uptown and Baker, many with 6 to 12 units, plus 1960s buildings in neighborhoods like Lakewood and Aurora. Smaller 5-8 unit buildings and converted mansions are common around City Park and Congress Park.
Colorado Springs has small buildings near downtown and the military installations, and Fort Collins and Greeley have buildings serving Colorado State and the University of Northern Colorado. Pueblo offers lower prices and higher rent-to-price ratios than the Front Range north.
LendingStreet treats 1 to 8 units as residential, so a five-, six-, seven- or eight-unit building in Colorado is underwritten as a rental property rather than a commercial loan. The loan qualifies on the building's rent: total monthly rent divided by the full monthly payment, including principal, interest, taxes, insurance and any association dues.
Standard programs look for 1.0x or better, and sub-1.0 programs exist for buildings that come up a little short. Maximum leverage on 5-8 unit properties is often lower than on a single-family rental and varies by program and loan size.
A 5 to 8 unit building is usually appraised with more weight on the income approach than a house would be. The appraiser compares its rents with similar small buildings nearby and reconciles that with sales comparables. Denver has frequent small apartment sales, though older buildings with unrenovated units can appraise well below renovated ones a few blocks away.
Underwriting works from the rent roll and the leases. Expect to provide a current rent roll showing each unit, its rent and lease dates, plus copies of the leases. Vacant units are usually counted at the appraiser's market rent, and some programs use the lower of actual and market rent.
Colorado's residential assessment rate is low, but values rose sharply in recent years and the legislature has adjusted assessment rules several times. Budget from current assessed value and the local mill levy, and expect changes at reassessment.
Colorado's state documentary fee on a sale is very small. Title, recording and lender costs make up most of closing costs. Your title company can provide a full estimate.
The Front Range is one of the most hail-prone areas in the country, and insurers price roofs accordingly. Expect higher premiums and possibly a percentage deductible for wind and hail. Buildings near the foothills may also see wildfire questions.
Get a quote on the whole building before you set your offer. A roof near the end of its life can raise the premium or limit the carriers willing to write the policy.
This example is illustrative and not a quote. An investor buys a Denver six-unit brick walk-up for $1,350,000. Each of the 6 units rents for $1,650 a month, for $9,900 in total. Property taxes are budgeted at $6,800 a year and the whole-building insurance quote is $10,200 a year.
At 75% LTV the loan is $1,012,500, leaving $337,500 down before closing costs. On 30-year amortization, principal and interest is about $7,080 a month. Adding $1,417 for taxes and insurance brings the payment to about $8,496, so the DSCR is about 1.17x, above the 1.0x standard minimum. If the insurance quote came in $350 a month higher, the ratio would fall to about 1.12x, which is why a firm quote matters before you set your offer.
| Item | Amount |
|---|---|
| Purchase price | $1,350,000 |
| Units and gross monthly rent | 6 units, $9,900 |
| Loan at 75% LTV | $1,012,500 |
| Principal and interest (30-year) | About $7,080 |
| Taxes and insurance per month | About $1,417 |
| Total monthly payment | About $8,496 |
| DSCR | About 1.17x |
Denver requires residential rental licenses with inspections, and several other cities have their own programs. Colorado adopted for-cause eviction requirements in 2024 for many tenancies, and state law still bars local rent control. Keep leases current and compliant.
Denver allows short-term rentals mainly in a host's primary residence, so investor STR income in Denver usually is not an option. Mountain towns have their own caps and permits.
Having these together before you apply keeps the appraisal and underwriting on schedule.
These loans fit investors in Colorado who want to qualify on the building's income instead of personal tax returns, hold title in an LLC and finance on a 30-year term. Our investor loans are business-purpose loans on non-owner-occupied property, so a building where you plan to live in one of the units is not eligible.
If the building needs heavy renovation or has several vacant units, a short-term bridge loan and a later refinance into a DSCR loan can be the better path. Buildings with nine or more units are commercial; see our multifamily loans page for those. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet finances 5 to 8 unit investment buildings in Colorado with DSCR loans from $150,000, qualified on the building's rent with LLC borrowers standard.
LendingStreet treats 1 to 8 units as residential, so a 5 to 8 unit building is underwritten as a rental property on its rent. Nine or more units is commercial lending.
Yes. Denver requires a residential rental license for most rentals, which includes an inspection. Check the requirements for your city before closing.
Generally no. Denver limits short-term rentals mainly to a host's primary residence. Mountain towns and other cities have their own rules, so check before relying on nightly income.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the building has to be fully used as a rental.
Vacant units are usually counted at the appraiser's market rent, and some programs use the lower of actual and market rent. Several vacancies can reduce the loan amount, and a bridge loan may be the better first step.
Yes, up to 75% LTV on standard programs, often lower on 5-8 units. The rent still has to cover the new payment, and seasoning rules vary by program.
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