Lubbock is a West Texas college and medical town. Texas Tech and its health sciences center drive rental demand, while hail and high property taxes drive the expense side.
In short: LendingStreet finances 5 to 8 unit rental buildings across Lubbock and Lubbock County with DSCR loans that qualify on rent, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum and a 1.0x standard minimum DSCR. In Lubbock, budget taxes at the full combined rate with no homestead exemption and price hail coverage carefully.
The Tech Terrace and Overton areas next to Texas Tech have small apartment buildings and houses divided into units that lease to students. The Heart of Lubbock and neighborhoods east of campus offer lower prices.
Southwest Lubbock has newer fourplex clusters and small buildings that rent to young professionals and medical staff. Wolfforth and Shallowater are mostly single-family, while Slaton has older stock at low prices.
Most purpose-built small apartment buildings near campus date from the 1960s through the 1980s, often two-story brick with exterior stairs and surface parking. Newer infill near campus is more often townhome-style student housing leased by the bed.
| Area | Typical stock | Tenant base |
|---|---|---|
| Tech Terrace and Overton | Small buildings, divided houses | Students |
| Heart of Lubbock | Older stock | Students, workforce |
| Southwest Lubbock | Newer fourplexes, small buildings | Professionals, medical staff |
| Slaton and outlying towns | Older buildings | Lower rents |
Texas Tech enrolls more than 40,000 students, and the Texas Tech University Health Sciences Center and Covenant and UMC hospitals add medical students and staff. Leases near campus often run August to July, sometimes by the bedroom.
Summer turnover and parental co-signers are normal. Underwriters total per-bedroom leases to a unit figure and compare it with market rent.
This example is illustrative and not a quote. An investor buys an eight-unit building near Tech Terrace for $820,000. The 8 units rent for an average of $925 each, or $7,400 a month in total. Taxes are budgeted at $1,570 a month and insurance at $520.
At 75% LTV the loan is $615,000, estimated principal and interest on a 30-year term is about $4,300, and the full payment is about $6,390, for a DSCR of about 1.16x. At 70% LTV the loan drops to $574,000, the payment to about $6,103 and the DSCR rises to about 1.21x, with $41,000 more brought to closing.
Taxes and hail insurance take a big share of the rent. The ratio still clears 1.0x, but summer vacancy near campus would cut real cash flow.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $820,000 | $820,000 |
| Loan amount | $615,000 | $574,000 |
| Down payment | $205,000 | $246,000 |
| Estimated principal and interest | $4,300 | $4,013 |
| Property taxes (monthly) | $1,570 | $1,570 |
| Insurance (monthly) | $520 | $520 |
| Total monthly payment | $6,390 | $6,103 |
| Gross monthly rent | $7,400 | $7,400 |
| DSCR | About 1.16x | About 1.21x |
Lubbock properties are taxed by the county, city, school district, hospital district and water district. Investors do not get homestead exemptions. The Lubbock Central Appraisal District reappraises regularly, and combined rates are high by national standards.
Budget taxes on your purchase price at the full combined rate. Texas has no transfer tax, which keeps closing costs lower.
Because the appraisal district reappraises regularly, a building that sells for well above its current appraised value will usually see a higher value on the next notice. Investors can protest values each spring, but it is safer to budget on the price you paid.
The South Plains get frequent hail and high winds. Roof damage claims are common, and carriers have raised premiums and wind and hail deductibles. Ask for roof age and claims history.
Dust storms and wide temperature swings wear on HVAC and windows. Budget reserves even though they do not enter the DSCR formula.
Some carriers now write roofs on an actual cash value basis once they pass a certain age, which means a hail claim pays depreciated value rather than full replacement. Read the roof terms, not just the premium, and ask whether impact-resistant shingles would earn a discount.
Lubbock limits the number of unrelated occupants in some single-family zoning districts, which matters near campus. Confirm the zoning, the legal unit count and any permits for conversions before relying on the rent roll.
Lubbock is a long way from other large Texas metros, which keeps the rental market fairly self-contained. Demand depends heavily on Texas Tech enrollment and the medical sector, so check enrollment trends and nearby new supply before you buy near campus.
Our DSCR loans treat a Texas building of five to eight units as residential, 1 to 8 units, rather than commercial. That means qualification on the property's rent instead of your personal income, with no tax returns or W-2s, and title held in an LLC as a matter of course.
Minimum loan size is $150,000 and there is no stated cap. Program maximums are 80% LTV on a purchase and 75% LTV on a cash-out, with rate-and-term up to 80% on some programs; expect less on many 5-8 unit files, since leverage varies by program and balance. The usual floor is a 1.0x ratio and a 620 score, with sub-1.0 options for thin-margin buildings. Cash-out seasoning also varies by program.
Our investor loans are business-purpose loans on non-owner-occupied property. A complete package gets a faster answer, so gather the items below and send them through the form below, or call (877) 298-1001. The Texas 5-8 unit DSCR page covers statewide issues; buildings of nine or more units belong on our commercial and multifamily pages.
Yes. Signed leases count, including by-the-bedroom leases near Texas Tech, as long as the unit totals are supported by the appraiser's market rent. A history of renewals and on-time payments helps.
Texas funds local government and schools largely through property taxes, and investors do not receive homestead exemptions. The county, city, school, hospital and water districts all add to the combined rate.
Mostly through insurance. Premiums and percentage-based wind and hail deductibles have climbed on the South Plains, and an older roof can be excluded or covered only at depreciated value.
Some single-family zoning districts limit unrelated occupants, which matters for divided houses near campus. Purpose-built apartment buildings in multifamily zoning are less affected. Check the zoning before you buy.
A single fourplex is a 2-4 unit DSCR loan rather than a 5-8 unit loan. If you own or are buying five or more of them, a blanket portfolio loan can finance the group under one note.
Loans start at $150,000 with no stated maximum. Purchase leverage goes up to 80% LTV and cash-out up to 75%, but maximum LTV on 5-8 units is often lower and varies by program.
The appraiser's market rent can support vacant units on some programs, but a building with weak occupancy usually gets more scrutiny. A bridge loan can carry a lease-up before a DSCR refinance.
No. The loan qualifies on the building's rent, not your personal income, so W-2s and tax returns are not required. A 620 minimum credit score applies.
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