Fresno's two-story stucco apartment buildings, with carports out back and six or eight units around a courtyard, are some of the most common small investor buildings in the Central Valley. At eight units or fewer, they still qualify for residential DSCR financing.
In short: LendingStreet finances 5-8 unit residential buildings in Fresno, Clovis and Fresno County with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and LLC borrowers are standard. Max LTV on 5-8 units can be lower than on 1-4 units and varies by program, and the rent roll, condition and California rent rules get a close look.
Five- to eight-unit buildings cluster near Fresno State along Shaw and Cedar avenues, in the Tower District, along the Blackstone corridor and in central and southeast Fresno neighborhoods built out in the 1960s through the 1980s. Older parts of Clovis have them too. Most are two-story wood-frame and stucco buildings with carports, laundry rooms and a mix of one- and two-bedroom units.
Tenants include students and staff at Fresno State, hospital workers, and families who work in agriculture, logistics and government.
Many of these buildings have been owned by the same people for decades, with rents that have fallen behind the market and deferred maintenance. That creates value for a buyer willing to update units over time, but it also means the current rent roll may understate what the building could earn.
| Area | Typical building | What to check |
|---|---|---|
| Near Fresno State | 1970s-80s stucco 6-8 units | Student turnover, parking |
| Tower District | Older courtyard buildings | Older plumbing and wiring, permits |
| Blackstone corridor, central Fresno | 1960s-70s walk-ups | Rental registry, security, roofs |
| Old Town Clovis area | Small older buildings | Rent levels vs price |
The loan qualifies on the combined rent of all units against the full payment of principal, interest, taxes and insurance. We use current leases for occupied units and market rent for vacant ones. Appraisals on 5-8 unit buildings often consider income and expenses as well as sales, so a clean rent roll and operating history help support value.
Taxes reset to your purchase price under Proposition 13, so budget on your price, not the seller's long-held assessment.
Expect the appraiser to ask for a current rent roll, copies of leases and a year or two of income and expense statements. Missing or messy records slow the file and can lead to a more conservative value.
This example is illustrative and not a quote. An investor buys an eight-unit building for $1,280,000. The rent roll is shown below, totaling $10,600 a month. Taxes are budgeted at about $1,280 a month based on the purchase price and insurance at $520.
With the program allowing 70% LTV on this building, the loan is $896,000. Estimated principal and interest on a 30-year loan is about $6,112, and the full payment is about $7,912, a DSCR of about 1.34x. Owner-paid utilities and maintenance come out of the remaining cash flow.
Two-bedroom units carry more of the rent here, and they also tend to stay leased longer. A building with a higher share of two-bedrooms usually shows steadier income than one made up of studios near campus.
| Unit type | Units | Rent each | Monthly total |
|---|---|---|---|
| 1-bedroom | 4 | $1,200 | $4,800 |
| 2-bedroom | 4 | $1,450 | $5,800 |
| All units | 8 | $10,600 | |
| Monthly payment with T&I | $7,912 | ||
| DSCR | About 1.34x |
Most Fresno 5-8 unit buildings are more than 15 years old, so they are generally covered by the statewide Tenant Protection Act, which caps annual rent increases and requires just cause for many terminations after a tenant has been in place for a year. Plan your numbers on current rents and modest increases. When a unit turns over, you can generally set the new rent at market. Confirm how the law applies with a California attorney.
Student housing near Fresno State brings its own pattern: leases that turn over each summer, parents as co-signers and higher wear on units. Plan reserves for turnover and furnishings if you lease to students.
Covered buildings also need the required tenant notices about the law, so check that existing leases include them.
Inside Fresno city limits, rental units must be registered with the city, and the city can inspect for health and safety issues. On older buildings, check these items before you buy.
Many older Fresno apartment buildings have one water meter and shared trash service, so the owner pays water, sewer and trash, and often common-area electricity and landscaping. These are not in the DSCR payment, but they affect cash flow. Ask for the seller's actual bills for the past year and compare them with the rents.
Some owners recover part of these costs with a utility billing arrangement in new leases. California has specific rules on how that is done, so check them before changing how tenants are charged.
Insurance on an older wood-frame building has become more expensive in California. Get a quote for property and liability coverage early, and ask about roof age, since carriers often price heavily on it. A higher premium than expected is a common reason a 5-8 unit ratio comes in lower.
Ask for the building's loss history too. Past water damage or liability claims can affect both the premium and which carriers will quote.
Buildings with nine or more units are commercial; see our multifamily loans page. If you own five or more rentals, including small apartment buildings, a blanket portfolio loan can combine them under one loan with release provisions.
Buildings with several units also have more exposure to liability claims, so confirm the policy's liability limits as well as the property coverage. Carriers may require updated smoke detectors, railings or electrical panels before they will bind.
Send the address, price, rent roll, tax estimate, utility bills and insurance quote through the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. We will run the ratio at a few leverage levels.
Residential. We finance 1-8 units with residential DSCR loans; nine or more is commercial.
It varies by program and is often lower than on 1-4 units.
They affect how fast rents can rise. The loan is based on current rents, so plan on modest increases.
Current leases for occupied units and market rent for vacant ones.
No. Under Proposition 13 the property is reassessed to your purchase price.
No. The building qualifies on its rent.
Yes. Rate-and-term and cash-out refinances are available, subject to program limits.
Yes, across Fresno County and neighboring counties.
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