Small apartment buildings are scattered all over Winston-Salem: two-story brick buildings from the 1950s and 1960s, older walk-ups near downtown and the West End, and the occasional converted house. They sit in a gap between house loans and commercial loans, and a DSCR loan can fill it.
In short: LendingStreet finances 5 to 8 unit residential buildings in Winston-Salem and Forsyth County with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and maximum LTV on 5-8 unit properties can be lower than on 1-4 units, so it varies by program.
Much of the city's 5-8 unit stock was built in the post-war decades as garden-style or two-story brick apartments, often six or eight units with a shared parking lot. You find them along the older arterials, near the hospitals and Hanes Mall area, near Winston-Salem State and in neighborhoods south and east of downtown. Closer in, the West End and Ardmore have some older walk-ups and large houses divided into apartments.
Tenants are mostly workforce renters: hospital and service workers, students and people who want a lower rent than newer complexes charge. Rents per unit are moderate, so these buildings depend on low vacancy and controlled expenses.
The appeal is cost per unit. A well-run eight-unit building can often be bought for less per door than eight scattered houses, with one roof, one lot and one insurance policy. The trade-off is concentration: one building, one neighborhood and more management intensity.
This example is illustrative and not a quote. An investor buys an eight-unit, two-story brick building for $760,000. Units are two-bedrooms renting for about $975, so qualifying rent is $7,800 a month. Taxes are about $820 a month and insurance about $460.
At 75% LTV the loan is $570,000. Estimated principal and interest is about $3,927 and the total payment about $5,207, for a DSCR of about 1.50x. If the appraiser's market rent for renovated units is $1,060, and leases support it, qualifying rent rises to $8,480 and DSCR to about 1.63x. In a building like this, the rent per unit drives the answer.
The table shows the main lever in this market: rent per unit. Taxes and insurance are moderate, so a modest difference in rent across eight units moves the ratio more than most other inputs. Support market rent with recent leases on renovated units in the building or nearby.
| Item | Current rents | Market rents after renewals |
|---|---|---|
| Loan at 75% LTV | $570,000 | $570,000 |
| Total monthly payment | $5,207 | $5,207 |
| Rent per unit | $975 | $1,060 |
| Total rent | $7,800 | $8,480 |
| DSCR | About 1.50x | About 1.63x |
Five- to eight-unit buildings are often appraised with substantial weight on income as well as comparable sales. In Winston-Salem, sales of small apartment buildings are less frequent than house sales, so appraisers may use sales from Greensboro or elsewhere in the Triad. A clean, current rent roll and copies of every lease help support value and rent.
Maximum LTV on 5-8 unit properties varies by program and can be lower than on a fourplex. Plan your down payment with that in mind.
Appraisers also look at the building's expense history when they weight the income approach. Providing a simple twelve-month operating statement, with rent collected, vacancy, utilities, repairs and management, helps the valuation and shows a lender that the building is run carefully.
The DSCR formula uses principal, interest, taxes, insurance and any HOA. Many older Winston-Salem apartment buildings also have owner-paid water and sewer, common-area electric, lawn care, trash and turnover costs, plus aging HVAC units, one per apartment. Those expenses do not change the ratio, but they decide whether the building actually makes money.
Owner-paid water and sewer is common in older Winston-Salem apartment buildings because units were never separately metered. Submetering or billing back utilities can improve cash flow, but check what your leases allow and what tenants in comparable buildings pay.
North Carolina does not permit local rent control, and state law limits general rental registration programs. Evictions go through small claims court in the county. Those rules make rent and turnover more predictable than in many states. Winston-Salem still enforces minimum housing standards, and multi-unit buildings with deferred maintenance can draw inspections, so condition is the main local risk.
Parking lots, retaining walls and stormwater drainage are often deferred on older garden-style buildings. Repaving or regrading can be expensive, so include them in your capital plan.
A common plan is to buy a tired building, renovate units as they turn over and raise rents to market. If the building qualifies on current rents, a DSCR loan can fund the purchase, with renovations paid as you go. If too many units are vacant or down, a bridge loan first and a DSCR refinance later may fit better.
Turnover planning matters too. Renovating units one at a time as leases end keeps occupancy high, which protects the ratio, while a building-wide renovation with many vacant units at once usually needs short-term financing first.
Buildings with 9 or more units are commercial loans, covered on our multifamily loans page. If you own several small buildings or a mix of houses and small apartment buildings, a blanket portfolio loan can combine five or more properties into one loan and one payment.
Five- to eight-unit buildings with a mix of houses on separate parcels, common in some older neighborhoods, may be financed as separate loans or as part of a blanket loan depending on how the parcels are recorded.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll, leases, tax record and owner-paid expenses. We will run the ratio and tell you what leverage the building supports. See also 5-8 unit DSCR loans in North Carolina, or use the form below.
Yes. Our DSCR programs cover 1-8 units. Nine or more units are commercial.
Combined rent of all units divided by principal, interest, taxes, insurance and any HOA.
It varies by program and can be lower than on 1-4 unit properties.
No. North Carolina law does not allow local rent control.
The appraiser may assign market rent, but leased units are stronger evidence.
No. The loan qualifies on the building's rent.
The minimum is 620.
Yes. We finance 5-8 unit residential rentals across Forsyth County and the Triad.
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