Roanoke's Old Southwest is full of big Victorian houses that were split into apartments decades ago. Prices per unit are low by Virginia standards, which is why investors from Northern Virginia and beyond come here when they want 5-8 unit buildings that cover the payment.
In short: LendingStreet finances 5-8 unit buildings in Roanoke, Salem and Roanoke County with DSCR loans that qualify on the building's combined rent, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, and leverage on 5-8 units varies by program. In Roanoke the main questions are building condition and historic review, not rent coverage.
Old Southwest has the largest supply of converted Victorians with five to eight units. Raleigh Court, Grandin Village and Wasena add brick walk-ups and four-to-six unit buildings near the Roanoke River greenway, close to Carilion Roanoke Memorial Hospital.
Salem has small buildings near Roanoke College, and Vinton and the Williamson Road corridor offer lower prices with older stock.
Demand is anchored by Carilion Clinic, the Virginia Tech Carilion medical school and research institute downtown, and a steady base of government and manufacturing jobs. That mix keeps occupancy steady even though rents are modest.
| Area | Typical building | Tenant base |
|---|---|---|
| Old Southwest | Victorian houses split into 5-8 units | Hospital and downtown workers |
| Grandin Village and Raleigh Court | Brick walk-ups | Young professionals |
| Salem | Small apartment buildings | College staff and working households |
| Vinton and Williamson Road | Older buildings at lower prices | Long-term local tenants |
A Victorian split into six units decades ago can have a mix of original and added systems: several electric panels, a shared boiler, stairs added at the back and units in the attic or basement. Insurers and appraisers will look at fire separation, egress and whether each unit is legal.
Ask the city for the building's permitted unit count, and confirm that every unit you are buying is recognized. Rent from a unit that is not legal may not count toward the ratio.
Our DSCR programs treat 5-8 units as residential. Qualification runs on rent, not on pay stubs or tax returns, and most investors close in an LLC. The floor is a 620 credit score, loan sizes begin at $150,000 with no stated cap, and 30-year terms are available.
Underwriting divides the building's total monthly rent by the monthly payment including taxes and insurance. A 1.0x result is the usual minimum, with sub-1.0 options on some programs. Leverage tops out at 80% LTV on purchases and 75% on cash-out for smaller rentals, and it often sits lower on 5-8 unit properties and larger balances, so expect it to vary by program.
On a building this size, the appraisal leans on the rent roll. Each unit's rent is compared with nearby rentals, so above-market leases or several vacant units can pull the supported income down. Bring leases and a clear note on any unit that is empty or under renovation.
The City of Roanoke, the City of Salem and Roanoke County are separate taxing jurisdictions with their own rates and assessments. Roanoke and Salem are independent cities, so a building's address decides which assessor and rate apply.
Virginia closing costs include a state recordation tax with a local add-on and a grantor tax usually paid by the seller. Taxes on a low-priced building are a smaller share of the payment, but they still belong in the ratio.
This example is illustrative and not a quote. An investor buys a six-unit converted Victorian in Old Southwest for $630,000. The units rent for $875 each, for a combined $5,250 a month. Taxes are budgeted at $608 a month and insurance at $350.
Financing 75% of the price gives a $472,000 loan. Estimated principal and interest comes to about $3,300, the full payment to about $4,259, and the ratio to about 1.23x. Dropping to 70% LTV, a $441,000 loan, brings the payment to about $4,042 and the ratio to about 1.30x. The ratio is comfortable at either leverage level. The bigger risk is capital repairs on an old building, so keep reserves after closing.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $630,000 | $630,000 |
| Combined monthly rent | $5,250 | $5,250 |
| Loan amount | $472,000 | $441,000 |
| Estimated principal and interest | $3,300 | $3,084 |
| Taxes and insurance | $958 | $958 |
| Total monthly payment | $4,259 | $4,042 |
| DSCR | About 1.23x | About 1.30x |
Old Southwest is a local historic district, and exterior changes require review by the city's Architectural Review Board. Replacement windows, siding and porches are the usual issues.
Budget for approved materials if you plan exterior work. Interior renovations generally do not need historic review, but they still need building permits.
Historic district status can also help. Federal and Virginia historic rehabilitation tax credits exist for qualifying work on contributing buildings, so ask a tax adviser before you start a major renovation.
Roanoke has a long history of river flooding, and parts of Wasena, the Roanoke River corridor and areas near Tinker Creek and Peters Creek are in mapped flood zones. Flood insurance is generally required there and adds to the payment.
Older wood-frame conversions can carry higher premiums than brick buildings. Get a full-building quote before you finalize your offer.
Ask about the building's claim history too. A past water or fire loss can affect what carriers will offer and at what deductible.
Pulling these together up front saves a round of follow-up questions.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, unit count, rent roll and the price or estimated value through the form below, or call (877) 298-1001.
We run the ratio on realistic taxes and insurance, test it at a few loan amounts and come back with options. For statewide rules, see our Virginia 5-8 unit DSCR page.
Often, because prices per unit are low relative to rent. The rent still has to clear the program minimum.
Yes. They are separate jurisdictions with different tax rates and assessors.
Rent from a unit that is not legal may not count. Confirm the permitted unit count with the city.
If the building is in a mapped flood zone, yes. Check the flood map early.
Yes. We finance 5-8 unit buildings in Salem, Vinton and Roanoke County as well as the city.
Yes. Our residential DSCR programs cover 1 to 8 units. Buildings with 9 or more units are financed as commercial.
The minimum is 620. Income documents are not required, because the loan is approved on the building's rent.
Sub-1.0 DSCR programs exist. A larger down payment also lowers the payment and can lift the ratio over 1.0x.
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