Columbia has a good supply of small apartment buildings: two-story brick buildings from the 1960s near USC, old houses split into units in Shandon and Elmwood Park, and small complexes along the Devine Street and Rosewood corridors. Five to eight units is too big for many residential lenders and too small for most commercial ones.
In short: LendingStreet offers DSCR loans on 5-8 unit residential buildings in Columbia, SC, 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 rental and varies by program. Buildings of 9 or more units are commercial.
Near USC, small brick buildings sit on side streets south and east of campus and in the blocks around Olympia. Shandon, Rosewood and Elmwood Park have older houses that were divided into apartments. Along Devine Street, Rosewood Drive and near Five Forks and Harbison there are small complexes built for young professionals. Fewer five to eight unit buildings exist in the newer suburbs, where rentals are mostly single-family.
These buildings often trade quietly between local owners, and some never reach the open market. Having financing lined up in advance helps when one becomes available.
Older Lexington County towns such as Cayce and West Columbia also have a handful of small buildings close to the river and the Riverwalk area, often at lower prices per unit than near campus.
The building qualifies on the combined rent of all units against the full payment: principal and interest, taxes, insurance and any HOA. Appraisers use small income property methods and compare sales of similar buildings, which are limited. Expect more review than on a single house and lower leverage; the limit varies by program.
If a unit is vacant, some programs use the appraiser's market rent for it. Ask before you count it.
| Item | 1-4 units | 5-8 units |
|---|---|---|
| Qualifies on | Combined rent | Combined rent |
| Standard minimum DSCR | 1.0x | 1.0x |
| Max LTV | Up to 80% purchase | Often lower; varies by program |
| Property tax | 6% assessment ratio | 6% assessment ratio |
| Insurance | Landlord policy | Often a small commercial-style policy |
Near USC, the value of a building depends on how many tenants each unit can legally house. Columbia's zoning limits the number of unrelated occupants in many residential districts, and converted houses may have been divided without approvals. Ask the city to confirm the legal unit count and any occupancy limits, and make sure the rent roll reflects what is allowed.
Buildings with a clear certificate of occupancy for each unit are easier to finance and insure than houses that were divided informally. If the paperwork is unclear, sort it out before closing.
This example is illustrative and not a quote. An investor buys an eight-unit brick building near campus for $880,000. Units rent for an average of $1,050, for gross rent of $8,400 a month. Taxes at the 6% assessment ratio are budgeted at $1,300 a month and insurance at $650.
At 75% LTV the loan is $660,000, with estimated principal and interest of about $4,615, a total payment near $6,565 and a DSCR of about 1.28x. At 70% LTV the loan is $616,000, the payment is about $6,257 and the ratio is about 1.34x.
This building carries a healthy ratio at either leverage, which is common for older Columbia buildings bought at moderate prices per unit. The 6% assessment ratio still makes taxes the largest expense after the loan payment.
Run the same math with one unit vacant for two months a year. If the building still covers its payment, the purchase has a reasonable margin.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan | $660,000 | $616,000 |
| Estimated principal and interest | $4,615 | $4,307 |
| Taxes and insurance | $1,950 | $1,950 |
| Total payment | $6,565 | $6,257 |
| DSCR at $8,400 rent | 1.28x | 1.34x |
Buildings close to campus lease on the school year, and summer vacancies are normal. Graduate students and hospital staff may sign 12-month leases, which smooths income. Underwriting uses leases and market rent, but keep reserves for turnover and make-ready costs every August.
Buildings with a mix of graduate students and working tenants tend to have steadier occupancy than buildings rented only to undergraduates, which helps when you plan reserves.
Many of these buildings are 50 or more years old. Inspect the roof, electrical service and metering, plumbing, crawl spaces, signs of termite damage and drainage. Those findings drive the insurance quote and your repair reserve, which shape the real return.
Ask your inspector about fire separation between units and smoke detection. Carriers look for both, and upgrades can lower the premium.
Window units, older wall heaters and shared water heaters are common in these buildings. Factor replacement into your reserve.
Investors who build a portfolio of small buildings and houses often move to a blanket portfolio loan once they own five or more properties. For 9 units or more, see our multifamily loans page.
A blanket loan's release provisions let you sell one building later without refinancing the rest.
If your portfolio includes houses in Lexington County and a building near campus, they can sit on the same blanket loan, since each property is 1-8 units.
The DSCR payment includes principal, interest, taxes, insurance and any HOA. Running a small building costs more. Water and sewer are often paid by the owner in older Columbia buildings, along with common-area power, trash, landscaping, pest control and a property manager. Older buildings also need a real reserve for roofs, HVAC units and plumbing.
Appraisers look at the full income and expense picture when they value a 5-8 unit building. Twelve months of rent deposits, utility bills and a rent roll that matches the leases make underwriting smoother, especially when the seller is a long-time local owner who managed informally. Buildings with separate electric meters and tenant-paid utilities usually show stronger net income.
LendingStreet finances small residential buildings across Columbia and South Carolina. 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.
We will run the ratio at more than one loan amount and tell you plainly where leverage lands.
Residential for our programs. Buildings of 9 or more units are commercial.
It varies by program and is often lower than on a single-family rental.
Rental property in South Carolina uses a 6% assessment ratio with full millage. Budget the full bill.
Yes. They limit how many tenants a unit can legally house, which affects rent.
Yes, for every unit.
Yes. LLC borrowers are standard.
With five or more properties, a blanket portfolio loan may fit.
On some programs, yes, based on the appraiser's market rent. Occupied units are underwritten on their leases.
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