I've got three STR units running and I'm used to putting real money into deals, but this one the seller is current, loan balance is basically purchase price, and I cannot figure out what number I write on a check at the table. Do I owe her anything at all, or is the value I'm bringing just taking the loan off her hands?
The value you're bringing is exactly that, debt relief plus a clean exit. But I made the mistake of treating that as automatically enough on a deal in rural Tennessee, 2021, seller was current on a 3.4% note and had maybe four thousand in equity. I brought zero to the table, she signed, and two weeks later she came back saying she felt like she got nothing for her house, and that emotional reality almost blew up the closing on a second property I was trying to buy from her brother. The relationship cost mattered more than the math. I ended up cutting her a $2,500 goodwill payment after the fact just to keep things clean, and I should have just built that in from the start. On a zero-equity sub-to, even handing the seller $1,500 to $3,000 cash for moving costs or just dignity money changes how they feel about the deal for years, which matters when you're doing long holds and you need them not to call the lender.
Had a deal like this in 2022, brought $4k to cover arrears that weren't disclosed until day of closing.
That 3.1% is the real value here, not the price.
Depends on what her actual pain is. If she's current and has no hardship, she has zero reason to hand a 3.1% loan to a stranger unless you sweeten it somehow. I'd find out why she's selling before I decided whether to write any check at all. Last year I picked up a house in Tulsa where the seller was current but facing a job relocation in six weeks, so I covered her next two payments and moving costs, about $3,800 total, and that was enough to make her feel like she got something. The rate was the whole deal for me and I would have paid more. What I'd want to know is whether she has a realtor in her ear telling her she can list this thing and get full pop.
Sometimes the number you write is zero, but she still needs something to walk away clean.
What's her monthly payment and what's the property grossing as an STR right now?
The framing of "what do I owe her" is the wrong frame entirely. You are not buying equity, you are acquiring control of an asset and a below-market debt instrument simultaneously. Those are two separate things and conflating them is why you can't land on a number. The 3.1% loan on a current 30-year is worth real money to you, probably $40,000-$80,000 in interest savings over a 7-10 year hold depending on the balance, so the question is actually how much of that spread you are willing to share with her to get the deal done.
What I would do instead is back into it from her situation. If she has zero equity and is current, she has a reason she wants out that isn't financial upside, maybe relocation, maybe she's tired of carrying it, maybe a life event. Figure out what that actually costs her to walk away cleanly, moving expenses, lease break fees, whatever, and write a check for that specific number. I did something similar on a duplex in Columbus in early 2024, seller needed $6,200 to cover her deposit on a rental in Phoenix and that was the entire conversation. The loan balance was $214,000 at 3.4%, and I was not paying her equity she didn't have, I was solving a logistics problem for $6,200. That is the number you are looking for.
