For real estate investors
MAO Calculator (Maximum Allowable Offer)
MAO (Maximum Allowable Offer) is the most you can pay for a property and still hit your profit target. This calculator gives you the quick rule of thumb and a detailed version that subtracts every cost, so you can see where an offer really lands.
Calculator and results
Rule of thumb
- ARV × 70.0%
- $210,000
- Minus rehab
- -$45,000
- Maximum allowable offer
- $165,000
Detailed breakdown
- ARV
- $300,000
- Minus rehab
- -$45,000
- Minus buying costs
- -$5,000
- Minus holding costs
- -$8,000
- Minus selling costs (8.0% of ARV)
- -$24,000
- Minus desired profit
- -$30,000
- Minus wholesale fee
- $0
- Maximum allowable offer
- $188,000
For estimates only. Not financial, tax or lending advice.
How it’s calculated
- Rule of thumb: ARV (after-repair value) times a percentage, minus rehab. The classic version uses 70%, and you can change the percentage to fit your market.
- Detailed: start from ARV and subtract rehab, buying costs, holding costs, selling costs, your desired profit and any wholesale fee. What is left is the most you can offer.
- Selling costs are a percentage of ARV. Desired profit can be a dollar amount or a percentage of ARV.
- If MAO comes out negative, the numbers do not support an offer at those assumptions.
MAO Calculator questions
What does MAO mean?
MAO stands for Maximum Allowable Offer: the highest price you can pay and still reach your profit target after rehab and costs.
What is the 70% rule?
The 70% rule says to pay no more than 70% of the after-repair value minus the cost of repairs. It is a quick screen, not a substitute for running the full numbers.
Why are the two results different?
The rule of thumb only uses ARV and rehab. The detailed method subtracts buying, holding and selling costs, your profit target and any wholesale fee, so it reflects your own deal.
How do wholesalers use MAO?
Wholesalers subtract their assignment fee so the end buyer still gets their profit. Enter your fee in the wholesale fee field.
Keep the deal, the budget and the numbers together.
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