Daytona Beach has a distinctive supply of small apartment buildings: one- and two-story concrete block buildings from the 1950s through the 1970s, many with six or eight units around a courtyard or parking lot, on the beachside and in the older mainland neighborhoods. A DSCR loan can finance them as residential rentals.
In short: LendingStreet finances 5 to 8 unit residential buildings in Daytona Beach and across Volusia County with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x, and maximum LTV on 5-8 unit properties can be lower than on 1-4 units, so it varies by program. In Daytona, the building's insurance policy is often the biggest single variable.
On the beachside, the Seabreeze area and the blocks between the Halifax River and the ocean have older small apartment buildings, some long-term rentals and some that once operated as seasonal or motel-style units. On the mainland, Holly Hill, Midtown, the areas around Bethune-Cookman University and parts of South Daytona and Ormond Beach have small block buildings that lease to workers, students and retirees.
Before you buy, confirm how the building is recorded. A building that was converted to condominium ownership is a different legal structure from a single rental building with one owner, and a former motel may not be zoned for long-term residential use.
These buildings appeal to investors because the price per unit is often lower than for single-family rentals, and long-term demand is steady from hospital workers, students, service workers and retirees. The trade-offs are age, salt-air wear on older concrete and metal, and a single insurance policy that can swing the economics.
Insurance for a 5-8 unit building is usually written as a commercial-style property policy, and in coastal Volusia the wind portion dominates the premium. Carriers look at the roof, the age of the building, opening protection, distance to the coast and the flood zone. Premiums for similar buildings can differ widely, and a percentage-based wind deductible can be large.
Get a real quote for the specific building before you set your offer. Updating the roof and adding impact protection can reduce premiums but costs money up front, which is often a reason to plan a short-term loan before a DSCR loan on a tired building.
This example is illustrative and not a quote. An investor buys a six-unit, one-story block building on the mainland for $780,000. Each unit rents for about $1,350, so qualifying rent is $8,100 a month. Taxes after the purchase reset are budgeted at $1,150 a month and insurance at $1,100.
At 75% LTV the loan is $585,000, with estimated principal and interest of about $4,030 and a total payment of about $6,280, for a DSCR of about 1.29x. If the program caps this building at 70% LTV, the loan is $546,000 and DSCR about 1.35x. If the insurance quote came in at $1,500 instead, DSCR at 75% would drop to about 1.21x.
The table shows it plainly: in coastal Volusia, a change in the insurance quote moves the ratio as much as a change in leverage. Shop the building's coverage early and confirm what wind deductible each quote assumes.
| Item | 75% LTV | 70% LTV | 75% LTV, higher insurance |
|---|---|---|---|
| Loan amount | $585,000 | $546,000 | $585,000 |
| Estimated principal and interest | $4,030 | $3,762 | $4,030 |
| Taxes | $1,150 | $1,150 | $1,150 |
| Insurance | $1,100 | $1,100 | $1,500 |
| Total monthly payment | $6,280 | $6,012 | $6,680 |
| DSCR at $8,100 rent | About 1.29x | About 1.35x | About 1.21x |
Florida caps annual increases in assessed value on non-homestead property at 10% for non-school taxes, but the assessment resets toward market value when the building sells. A seller who held the building for years may show a tax bill far below what you will pay. Use a post-purchase estimate based on the Volusia County Property Appraiser's methods and the city's millage.
The jump can be large on a building that has been held for a long time. Budget for it from the start, and check whether the building is in a city or the unincorporated county, since millage rates differ.
Many older beachside and riverfront buildings sit in flood zones. If the building is in a special flood hazard area, flood insurance is generally required, and the FEMA 50% rule applies to large renovations, which can limit how much you can improve an older building without bringing it up to current flood standards. Hurricane Ian's inland flooding in 2022 showed that areas away from the beach can flood too.
If the building is a condominium, Florida's post-Surfside rules require milestone structural inspections and reserve studies for many older buildings, which can bring special assessments. A single-owner rental building does not have an association, but the same structural questions about older concrete near salt air still matter, so get a thorough inspection.
Some beachside buildings operate as short-term or seasonal rentals. Whether that is allowed depends on zoning that predates Florida's 2011 preemption, and on state licensing. Most 5-8 unit DSCR loans in Daytona are underwritten on long-term leases.
Concrete spalling, rusted balcony railings and aging flat roofs are common issues in older Daytona buildings. A structural or property condition inspection before you close is money well spent.
Buildings with 9 or more units are commercial loans; see our multifamily loans page. If you own several small buildings or a mix of houses and small buildings, a blanket portfolio loan can combine five or more properties into one loan and one payment.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll, leases, tax estimate and a building insurance quote. We will run the ratio and tell you what leverage the building supports. See also 5-8 unit DSCR loans in Florida, or use the form below.
Residential. Our DSCR programs cover 1-8 units; 9 or more units are commercial.
It varies by program and can be lower than on 1-4 unit properties.
Coastal wind coverage on a multi-unit building can be one of the largest monthly costs, and it counts in the DSCR payment.
Usually not. The assessment resets toward market value when the building sells.
Only if zoning and licensing allow it. Most 5-8 unit loans here use long-term leases.
No. The loan qualifies on the combined rent.
The minimum is 620.
Yes. We finance 5-8 unit residential rentals across Volusia County.
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