Small apartment buildings close to Mayo Clinic are some of the most sought-after rentals in Rochester. A six- or eight-unit building near downtown can house residents, nurses and staff within walking distance or a short ride of work.
In short: LendingStreet finances 5-8 unit residential buildings in Rochester with DSCR loans that qualify on the combined rent of every unit, with no tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum. Max LTV on 5-8 units varies by program and can be lower than on 1-4 units, so the leverage available on the specific building is the first thing to confirm.
Most of the city's small apartment buildings sit near downtown and the Saint Marys campus, in and around Kutzky Park, Historic Southwest and the blocks east of downtown. There are also 1960s and 1970s walk-ups along major corridors in the northwest and southeast that lease to staff working at the clinic and at other large employers.
Older buildings near the clinic often rent quickly but may have dated systems. Newer buildings farther out usually have separate meters, off-street parking and lower maintenance.
Converted houses near the clinic deserve special care. Some were split into units decades ago, and records may be incomplete. Check the city's records for the legal number of units, look for proper fire separation and exits, and confirm that each unit has its own entrance and smoke detection. These details affect the appraisal, the insurance quote and your ability to count every unit's rent.
| Location | Typical building | Tenant mix | Watch for |
|---|---|---|---|
| Near downtown and Saint Marys | Older converted houses and walk-ups | Residents, nurses, patient families | Parking, legal unit count, older systems |
| Northwest and southeast corridors | 1960s-1970s walk-ups | Staff and long-term tenants | Deferred updates, roof and windows |
| Newer infill | Recent 5-8 unit buildings | Professionals | Higher taxes on newer value |
Many Rochester buildings have tenants whose schedules follow the clinic: residency years, fellowship terms and travel contracts. That can mean predictable turnover in summer. Underwriters look at the current rent roll, so try to buy or refinance when the building is well leased, and ask for lease expiration dates to see whether several units turn over at once.
If some units operate as furnished medium-term rentals, tell us. The loan may be sized on long-term market rent for those units depending on the program.
Patient families and visiting researchers sometimes rent month-to-month in furnished units near downtown. That income can be strong, but underwriters often treat it conservatively. A building with mostly twelve-month leases and a few flexible units usually presents better than one built entirely around short stays.
This example is illustrative and not a quote. An investor buys a six-unit building near downtown Rochester for $840,000. Each unit rents for $1,300, so total rent is $7,800 a month. Olmsted County taxes are budgeted at $1,000 a month and insurance at $420.
At 75% LTV the loan is $630,000, estimated principal and interest is about $4,351, the total payment is about $5,771 and the DSCR is about 1.35x. If the program limits this building to 70% LTV, the loan is $588,000 and the DSCR is about 1.42x.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $630,000 | $588,000 |
| Estimated principal and interest | $4,351 | $4,061 |
| Taxes and insurance | $1,420 | $1,420 |
| Total payment | $5,771 | $5,481 |
| DSCR at $7,800 rent | 1.35x | 1.42x |
Minnesota taxes apartment buildings under a different classification from single-family and small multi-unit rentals, so a five-unit building can carry a different tax burden than a fourplex of similar value. Use the actual Olmsted County tax statement, and ask whether a recent sale or renovation will lead to a new valuation.
DSCR covers principal, interest, taxes, insurance and any HOA. It does not include utilities the owner pays, snow removal, common-area cleaning or repairs, which grow with the number of units. Budget them separately so the building still produces cash after a Minnesota winter.
Insurance on older Rochester buildings can be a large line item, especially after hail seasons that have pushed roof claims higher across southern Minnesota. Get a full quote early, ask about the wind and hail deductible and share any recent roof, electrical or plumbing updates with your agent. A better premium raises the DSCR directly.
Before closing, confirm that every unit is legal under city zoning and that any rental license or registration the City of Rochester requires is current. Ask the seller for inspection records and any open orders. Unpermitted units, such as a basement apartment added without approval, usually cannot be counted toward the rent used for your loan.
Our residential DSCR program stops at 8 units. If you are looking at a 9-unit or larger building in Rochester, see our multifamily loans page for commercial options.
Many Rochester investors start with a duplex or twin home and move up. Each DSCR loan qualifies on its own rent, so owning several properties does not limit what you can borrow on the next one. Our investor loans are business-purpose loans on non-owner-occupied property.
A 5-8 unit building also changes how you manage. With six or eight tenants, you need clear processes for maintenance requests, snow removal and turnover. Many investors hire a local property manager who knows the clinic-driven leasing cycle. A manager's fee is not part of the DSCR formula, but it should be part of your cash flow plan.
Send the address, price, rent roll with lease dates and the tax statement through the form below or call (877) 298-1001. We will confirm the leverage for the building and run the ratio. See also our Minnesota 5-8 unit page.
For our DSCR program, yes. Buildings with 5 to 8 units are residential; nine or more is commercial. That keeps underwriting closer to a residential rental than a commercial apartment loan.
Max LTV on 5-8 units varies by program and can be lower than on 1-4 units. Ask for the current limit on your specific building before you make an offer.
On the combined rent of all units, with no personal tax returns required.
Underwriting looks at the rent roll when you apply. Buying or refinancing when the building is well leased helps. A staggered lease calendar spreads turnover across the year.
Depending on the program, furnished units may be counted at long-term market rent. Ask before you apply.
Minnesota classifies apartment buildings differently, so use the actual county tax statement. Use the actual tax bill, not an estimate based on a fourplex.
Yes. LLC borrowers are standard, and you sign for the loan personally. LLC documents, an operating agreement and good standing are usually needed.
That is a commercial loan. See our multifamily loans page. Our multifamily loans page covers those larger buildings.
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