Small apartment buildings with five to eight units are scattered across the older parts of Kansas City, Kansas: brick walk-ups near downtown, converted houses in Strawberry Hill and Rosedale, and a few newer buildings out west. They are too big for a typical home loan and too small for most commercial lenders to care about.
In short: LendingStreet finances 5-8 unit residential buildings in Kansas City, Kansas with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns required. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Maximum LTV is often lower on 5-8 unit buildings than on 1-4 units and varies by program.
Most of the city's small apartment stock predates World War II. Look for brick buildings along the older commercial corridors near downtown and Strawberry Hill, large houses split into units in Rosedale and the Wyandotte neighborhood, and occasional small complexes in Argentine. West of I-635, a handful of newer buildings serve workers near Village West and the industrial parks.
Tenants include KU Medical Center employees and students, workers at the Fairfax district and service workers along the I-70 corridor. Rents are moderate, which keeps vacancy low but means the expense side has to be watched closely.
Residential lending generally treats 1-4 units one way and 5 or more another. Our DSCR programs cover 1-8 units as residential, so a six-unit building is underwritten on rent the same way a duplex is, with no need for a full commercial package. Because the building is larger and its value depends on income, maximum LTV can be lower and reserve requirements higher. Nine or more units falls under commercial and multifamily lending.
This example is illustrative and not a quote. An investor buys a six-unit brick walk-up near Strawberry Hill for $540,000. Each unit leases for about $950, for combined rent of $5,700 a month. Taxes are budgeted at $600 a month and insurance at $380.
At 75% LTV the loan is $405,000. Estimated principal and interest is about $2,763, the full payment about $3,743 and the DSCR about 1.52x. If the program caps leverage at 70%, the loan is $378,000, the payment about $3,559 and the ratio about 1.60x.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $405,000 | $378,000 |
| Estimated principal and interest | $2,763 | $2,579 |
| Taxes and insurance | $980 | $980 |
| Total monthly payment | $3,743 | $3,559 |
| DSCR at $5,700 rent | 1.52x | 1.60x |
The DSCR uses principal, interest, taxes, insurance and any HOA dues. In an older KCK building, the landlord often pays water, sewer and trash for the whole building, and sometimes common-area electric and a shared boiler. Those costs are not in the ratio, but they come out of your cash flow. Check the utility bills before you buy and consider separate meters where practical.
Inspect these closely on a pre-war building:
The Unified Government's rental licensing program applies to each rental unit, and a multi-unit building with several units can mean several items to correct after an inspection. Ask the seller for past inspection results and confirm what the license will require before closing. Life-safety repairs come first. Budget for them in your offer, and keep copies of the license and any correction notices, since a refinance appraiser or insurer may ask about them later.
Appraisers value 5-8 unit buildings with sales comparisons and an income approach. Kansas is a non-disclosure state, and small apartment buildings in KCK trade infrequently, so comparable sales may come from across the metro. Provide a rent roll, leases, a trailing operating statement and a list of capital improvements.
Investors usually come to the 5-8 unit category one of three ways. Some are buying their first small apartment building after owning a few houses and duplexes. Some already own a building financed with a local bank on a short commercial note and want a 30-year term qualified on rent. And some bought a tired building with short-term money, renovated units one at a time and now need permanent financing.
Each path uses the same core math: combined rent compared with principal, interest, taxes, insurance and any HOA dues. What changes is the evidence. A purchase relies on the seller's rent roll and leases, which you should verify against bank deposits. A refinance relies on your own records. A renovated building needs proof that units are leased at the new rents.
In older KCK buildings, the gap between a well-run property and a neglected one is wide. Units with updated kitchens, working laundry and reliable heat hold tenants longer and support a stronger appraisal. If the building needs significant work, consider a bridge or fix and flip loan first, then refinance into a DSCR loan once the units are leased.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll and expenses through the form below. We will test the DSCR at a few leverage levels. For buildings elsewhere in the state, see our Kansas 5-8 unit page.
Under our DSCR programs, 1-8 units is residential. Nine or more units falls under commercial or multifamily lending.
It varies by program and is often lower than on 1-4 units. Purchases can go up to 80% LTV on some programs, but 5-8 unit files frequently land lower.
We add the rent of every unit, using leases or market rent, and compare it with the full monthly payment.
No. The ratio uses principal, interest, taxes, insurance and HOA dues. Utilities affect your cash flow, not the ratio.
Yes. Rate-and-term and cash-out refinances are available, with leverage set by program.
Generally no. A rent roll and leases are the core documents, plus a trailing operating statement when available.
Yes. LLC borrowers are standard, and you sign for the loan personally.
Possibly. Some programs can use market rent for vacant units, but heavy vacancy makes the ratio and the appraisal harder. If several units are empty or need work, a bridge or fix and flip loan to stabilize the building, followed by a DSCR refinance once units are leased, is often the better path.
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