Small apartment buildings are one of the best values in the Topeka rental market. A six-unit brick building near downtown or Washburn University can cost about what two or three newer houses in southwest Topeka cost, while producing the rent of six. These buildings also solve the loan-size problem many Topeka investors face with inexpensive single-family homes.
In short: LendingStreet offers DSCR loans on 5-8 unit residential buildings in Topeka and Shawnee County, qualified on the combined rent of all units. Loans start at $150,000 with no stated maximum, LLC borrowers are standard and the standard minimum DSCR is 1.0x. Maximum LTV on 5-8 unit properties can be lower than on 1-4 unit rentals and varies by program.
Most small apartment buildings in Topeka fall into three groups.
Many of these buildings have been owned by the same local landlord for years and sell quietly through estates, direct mail or local property managers. Rents in long-held buildings are often below market, which is an opportunity, but the loan is based on what the building supports at closing, not on increases you plan later.
| Type | Where | What to know |
|---|---|---|
| Brick walk-up, 6-8 units | Central Topeka, near downtown and the Capitol | Often 1920s-1960s, steam or boiler heat, limited parking |
| Campus-area building, 5-8 units | Around Washburn University | Student and staff demand, summer turnover |
| 1970s-80s apartment building | Southwest and west Topeka | Separate meters more common, parking lots, flat or low-slope roofs |
We add the rent from every unit and divide by the full monthly payment: principal and interest, taxes, insurance and any dues. Vacant units can usually be counted at the appraiser's market rent, but a building with several vacancies may be a better fit for a bridge loan until it is leased up.
Owner-paid expenses such as common-area electric, water, trash, snow removal and boiler heat are not in the ratio, but they are larger on a multi-unit building. Ask for at least a year of actual bills before you buy.
If the building has a mix of unit sizes, the appraiser estimates market rent for each one. A rent roll listing each unit's bedrooms, size, lease dates and current rent makes the review faster.
This example is illustrative and not a quote. An investor buys a six-unit brick walk-up near downtown Topeka for $420,000. Each unit rents for $725, for $4,350 a month. Taxes are budgeted at $620 and insurance at $380 a month.
At 75% LTV the loan is $315,000, with estimated principal and interest of about $2,149 and a total payment of about $3,149, for a DSCR of about 1.38x. At 70% LTV the loan is $294,000, the payment is about $3,006 and the DSCR is about 1.45x. Maximum LTV varies by program; the building covers its payment comfortably either way.
Notice how much cushion the combined rent provides. Even if one unit sits empty for a month, the remaining five units still cover most of the payment, which is why lenders and investors both like buildings of this size.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $315,000 | $294,000 |
| Estimated principal and interest | $2,149 | $2,006 |
| Taxes and insurance | $1,000 | $1,000 |
| Total payment | $3,149 | $3,006 |
| DSCR | About 1.38x | About 1.45x |
In Kansas, residential property, including apartment buildings, is assessed at an 11.5% assessment ratio on the county's appraised value. Shawnee County reappraises every year, and income-producing buildings may be valued with an eye to their rents. Look up the parcel's current appraised value and use the actual bill rather than estimating.
If you raise rents significantly after buying, expect the building's value, and its taxes, to follow over time.
Older brick walk-ups often have boilers, original windows and flat or low-slope roofs. Carriers look closely at roof condition, wiring and heating, and Kansas wind and hail deductibles are often a percentage of coverage. Get a quote before you finalize your offer.
Fire separation between units, exits from upper floors and hard-wired smoke detectors matter for both safety and insurability. If anything is missing, budget to add it.
Ask the seller for the roof age and any recent hail claims. A flat roof replaced after a storm is a plus; one patched repeatedly is a near-term expense you should price into your offer.
Confirm with the City of Topeka that the building's unit count is legal and that it meets current code. A building marketed as seven units that is legally five will be appraised and financed as five. The city enforces property maintenance codes on rentals, and a building with open code cases can be harder to close on.
Ask the seller for any code notices or inspection reports from the past few years. They show what the city has flagged and whether repairs were completed, which tells you a lot about how the building has been run and what you may inherit.
Single houses in many Topeka neighborhoods sell for less than our $150,000 loan minimum can reach, while a six-unit building easily clears it. One roof, one tax bill and one insurance policy cover six tenants, and one vacancy cuts rent by a sixth rather than to zero.
Above eight units, a building is commercial and handled under a different program. See our multifamily page for nine or more units.
Owners of 5-8 unit buildings either self-manage with help from a maintenance contractor or hire one of the local firms that manage small multifamily. Either way, budget for lawn care, snow removal, common-area utilities, pest control and turnover costs, all of which are larger than on a single house.
Buildings near Washburn see more turnover around the academic year, while walk-ups near downtown and the Capitol often house longer-term tenants who work for the state or the hospitals. Matching lease end dates to strong leasing months keeps vacancy down.
Set aside a monthly reserve for big-ticket items such as roofs, boilers, windows and parking surfaces. On a six-unit building, those costs arrive less often than they seem to, but they are large when they do.
Send the address, rent roll, price or estimated value and a summary of operating expenses. Call (877) 298-1001 or use the form below to get a quote on your Topeka building.
If the building is partly vacant, ask whether a short bridge loan first and a DSCR loan after lease-up would cost less overall.
Yes. We offer DSCR loans on 5-8 unit residential buildings across Topeka and Shawnee County.
For our programs, 1-8 units is residential.
It varies by program and is often lower than on single-family rentals.
Combined rent of all units divided by the full monthly payment.
Usually at market rent if the appraisal supports it.
No. The building's rent qualifies the loan.
Yes. Campus-area 5-8 unit buildings qualify like any other leased building.
Only legal units count toward value and rent. Confirm the unit count with the city before you make an offer.
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