Small apartment buildings are scarce on Maui, and the ones that trade are usually older walk-ups in Wailuku and Kahului or low-rise buildings in Kihei. They are also among the few properties on the island where several year-round rents sit on one parcel.
In short: LendingStreet finances 5-8 unit residential buildings in Kahului, Wailuku, Kihei and elsewhere on Maui with DSCR loans that qualify on the building's combined rent. Loans start at $150,000 with no stated maximum, require a 1.0x standard minimum DSCR and a 620 credit score, and close in an LLC. Maximum LTV on 5-8 unit properties varies by program and is often lower than on a single-family rental.
In Wailuku, small apartment buildings cluster around the older town streets, often two-story concrete block or wood-frame walk-ups from the 1960s and 1970s. Kahului has a handful of similar buildings near the commercial core. In Kihei, many low-rise buildings sit in apartment-zoned districts, which matters because of the county's 2024 law on vacation rentals in those districts.
Some owners also hold a large lot with several separate cottages, a common pattern in older Maui neighborhoods. If the property has five to eight legal units, it can fit this program.
| Building type | Where you find it | Main review item |
|---|---|---|
| Concrete block walk-up | Wailuku town, Kahului core | Roof, plumbing and concrete spalling |
| Wood-frame low-rise | Wailuku, Kihei | Termites and insurance |
| Multiple cottages on one lot | Older Wailuku and Kahului streets | Legal unit count and permits |
| Apartment-district building | Kihei, West Maui | Long-term rent; STR phase-out status |
The ratio uses the combined rent of all units against the building's full payment: principal and interest, taxes, insurance and any association dues. Lenders typically want leases for each unit and may apply a vacancy assumption on some programs.
Max LTV can be lower on 5-8 unit properties and larger balances than on 1-4 unit rentals, and it varies by program. Buildings of nine or more units are commercial; see /multifamily-loans.html.
Appraisers will compare your rents with similar one- and two-bedroom units in Wailuku and Kahului, so below-market leases reduce the rent used today.
This example is illustrative and not a quote. An investor buys a six-unit Wailuku building for $2,150,000. Each unit rents for about $2,350, for $14,100 a month combined. At 70% LTV the loan is $1,505,000.
Estimated principal and interest on a 30-year term is about $10,267. Property taxes are budgeted at $720 a month and insurance at $1,350, reflecting higher premiums for older multi-unit buildings on Maui. The total payment is about $12,337 and DSCR is about 1.14x.
| Item | Monthly |
|---|---|
| Combined rent (6 units) | $14,100 |
| Estimated principal and interest | $10,267 |
| Property taxes | $720 |
| Insurance | $1,350 |
| Total payment | $12,337 |
| DSCR | 1.14x |
On older Maui multi-unit buildings, insurance can rival property taxes. Carriers look at roof age, wiring, distance to the coast and wildfire exposure, and some have limited new business since 2023. Get a quote during due diligence and confirm the hurricane deductible.
Buildings near Kahului Harbor or low-lying Kihei streets may need flood coverage. That premium belongs in the ratio.
Late in 2024, Maui County enacted a law to phase out vacation rental use in apartment-zoned districts over several years, with legal challenges following. For 5-8 unit buildings in those districts, underwrite on long-term rents. That also matches what Central Maui's workforce needs: year-round units near jobs.
Small Maui apartment buildings often have deferred maintenance. Look closely at the roof, plumbing, electrical panels and any concrete spalling on block buildings exposed to salt air.
Budget Maui County property tax on the class that matches your use; a building leased to year-round tenants may qualify for long-term rental treatment. Confirm with the county. Owners also pay Hawaii general excise tax on gross rents, an operating cost to plan for even though it is not part of the DSCR payment.
Maui's workforce housing shortage is real, and Central Maui is where most year-round jobs are: the hospital in Wailuku, the airport and harbor in Kahului, county offices, schools and retail. A small apartment building near those employers rents to tenants who want to stay, which supports steady occupancy and lowers turnover costs.
Spreading the payment across six or eight units also softens the effect of a single vacancy compared with a duplex. If one unit is empty for a month, the building can still cover its payment, which matters on an island where insurance and taxes keep climbing.
The trade-off is management. Small buildings need someone to handle repairs, rent collection and tenant turnover, and good property managers on Maui are in demand. Budget for professional management even if you plan to self-manage at first.
Values on these buildings also depend more on rent than on comparable home sales. Raising below-market rents over time, as leases turn, is how many Maui owners build equity in a small building.
Finally, check the water, sewer and trash billing. Some older Maui buildings bill utilities to the owner on a single meter, which raises operating costs and leaves less cash flow after the loan payment. Sub-metering or a utility reimbursement in new leases can help over time, where the county and your leases allow it.
When you compare buildings, look at rent per unit against nearby one- and two-bedroom apartments in Wailuku and Kahului rather than at single-family home rents. A building with rents well below market has room to grow as leases renew, while one already at the top of the market leaves less margin if insurance or taxes rise. Rent growth, not resale comps, is what usually supports a stronger refinance later on.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, rent roll, price and expenses through the form below or call (877) 298-1001. See our Hawaii 5-8 unit page for statewide details.
For our programs, 5-8 unit buildings are residential and can use DSCR financing. Nine or more units is commercial.
It varies by program and is often lower than on 1-4 unit properties, especially at larger balances.
Expect long-term rents to be used. Apartment-district vacation rentals are subject to the county's phase-out law and its legal challenges.
Yes, if they are legal dwellings. Permit records should confirm the unit count.
Combined rent of all units divided by the full monthly payment including taxes and insurance.
No. The loan qualifies on the building's rent, your credit and reserves.
Yes. LLC borrowers are standard.
Yes. Even if you self-manage at first, budgeting for a manager keeps the numbers realistic and leaves room if you need help later.
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