Davenport's older neighborhoods are full of small apartment buildings: grand houses on the Gold Coast split into six apartments, brick buildings near Palmer College and St. Ambrose, and plain 1960s eight-unit walk-ups on the north and west sides. They produce strong combined rent for their price, which is why investors look for them.
In short: LendingStreet offers DSCR loans on 5-8 unit residential buildings in Davenport and the Iowa Quad Cities, qualified on the combined rent of all units. Loans start at $150,000 with no stated maximum, LLC borrowers are standard and the standard minimum DSCR is 1.0x. Maximum LTV on 5-8 unit properties can be lower than on 1-4 unit rentals and varies by program.
Each part of the city has its own type of 5-8 unit building, and each has its own strengths.
Many of these buildings have been in the same hands for decades and sell off-market, through estates or directly to tenants of the local landlord community. Rents in long-held buildings are often below market, which is an opportunity, but the loan is based on what the building supports at closing, not on the increases you plan afterward.
| Building type | Where | Strengths | Watch for |
|---|---|---|---|
| Converted Victorian, 5-7 units | Gold Coast, Hamburg, near downtown | Character, central location | Historic review, legal unit count, shared systems |
| Campus-area apartments | Hilltop Campus Village | Steady demand from students and staff | Turnover, wear, parking |
| 1960s-70s walk-up, 6-8 units | North and west Davenport | Simple layouts, separate meters | Roof, windows, aging boilers |
We add the rent from every unit and divide by the full monthly payment: principal and interest, property taxes, insurance and any dues. Vacant units can usually be counted at the appraiser's market rent, but a building with several vacancies may fit a bridge loan better until it is leased.
Owner-paid utilities, common-area electric, snow removal and lawn care are not in the ratio, but on an eight-unit building they add up. Review the actual expense history before you buy.
Mixed unit sizes are common. A converted Victorian might have a large first-floor two-bedroom, two one-bedrooms above and a small attic studio. The appraiser estimates market rent for each unit separately, so a rent roll that lists unit size and bedroom count helps.
This example is illustrative and not a quote. An investor buys an eight-unit 1960s walk-up in north Davenport for $565,000. Each one-bedroom unit rents for $740, for a total of $5,920 a month. Taxes are budgeted at $880 and insurance at $420 a month.
At 75% LTV the loan is $423,750 with estimated principal and interest of about $2,891. The full payment is about $4,191, for a DSCR of about 1.41x. At 70% LTV the loan is $395,500, the payment is about $3,998 and the DSCR is about 1.48x. Maximum leverage varies by program, and the ratio is strong at either level.
Notice the cushion. Even if one unit sits empty for a month, the other seven still cover the full payment, which is a big reason investors favor buildings of this size.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $423,750 | $395,500 |
| Estimated principal and interest | $2,891 | $2,698 |
| Taxes and insurance | $1,300 | $1,300 |
| Total payment | $4,191 | $3,998 |
| DSCR | About 1.41x | About 1.48x |
Under Davenport's rental registration program, every unit must meet the housing code, along with the shared hallways, stairs and exits. Older conversions sometimes lack proper fire separation between units or a second exit from upper floors, and fixing those can be expensive.
Confirm the legal unit count with the city before you make an offer. A building advertised as seven units that is permitted for five will be valued and financed as five.
Ask the seller for the last few inspection reports. They show what the city has flagged before and whether repairs were completed, which tells you a lot about how the building has been run.
Many of the city's converted houses sit in locally designated historic districts. Exterior changes like new windows, siding or porch repairs may need review before a permit is issued. That does not stop a purchase or a loan, but it affects your repair budget and timeline, and buyers of these buildings should plan for it.
In Iowa, buildings with five or more units can be classified differently from one to four unit homes for property tax purposes. Look up the parcel on the Davenport assessor's site and use the actual classification and bill. Iowa taxes are paid in arrears, so a credit from the seller at closing is common.
Insurance depends on age, roof, wiring, heating and fire protection. If the building is near the river or Duck Creek, check the flood map. Carriers also ask about hard-wired smoke detectors and exits, so have that information ready.
Separate electric meters for each unit, and separate heat where possible, shift utility costs to tenants and make expenses more predictable. Older conversions often have one boiler and one water meter, so the owner pays heat and water for everyone.
Campus-area buildings near Palmer and St. Ambrose follow the school calendar, with many leases starting in summer. Walk-ups in residential neighborhoods tend to have longer-term tenants. Aligning lease dates with strong leasing months helps keep vacancy low, which matters because one empty unit in an eight-unit building cuts rent by an eighth.
Above eight units, a building is commercial and falls under a different program. Our multifamily page covers buildings with nine or more units.
Professional management is common at this size. Local firms that handle small multifamily usually charge a percentage of collected rent plus leasing fees. Even if you self-manage, the appraiser and underwriter will look at whether the building's expenses are realistic, so keep records of what you actually spend.
Plan capital items too. Roofs, boilers, windows and parking lot resurfacing on an eight-unit building cost more than on a house, and setting aside a reserve each month keeps a large repair from becoming a crisis.
Send the address, rent roll, purchase price or estimated value and a summary of expenses. Call (877) 298-1001 or use the form below to get a quote on your Davenport building.
If the building is partly vacant, ask whether a short bridge loan followed by a DSCR loan after lease-up makes more sense.
For our programs, 1-8 units is residential, so a 6-unit building qualifies for a residential DSCR loan.
It varies by program and can be lower than on single-family rentals.
Yes, if the city recognizes the unit count and the units meet code.
Usually at market rent if the appraisal supports it.
No. The building's combined rent qualifies the loan.
Leased units near the colleges count like any other lease. Expect more turnover in your planning.
Yes. We lend on 5-8 unit residential buildings across Scott County.
It counts only if the city recognizes it as a legal unit. Unpermitted units are usually excluded from value and rent.
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