MAO Calculator
Calculate the Maximum Allowable Offer for any investment property. Most flips use 70-75% of ARV minus repairs. Adjust the rule percentage based on your exit strategy: 65% for heavy rehabs in slow markets, 70% for standard flips, 75% for light cosmetic rehabs, or 80% for rental buyers.
MAO = ARV × 70% − Repairs − Wholesale Fee
Understanding the MAO formula
The Maximum Allowable Offer is the ceiling price for a property purchase. It's calculated by starting with the ARV, applying a discount percentage that accounts for the investor's profit and carrying costs, then subtracting repairs and any wholesale fee.
The rule percentage (70% in the classic formula) accounts for:
- Investor's target profit: 10-20% of ARV
- Buying closing costs: 1-2% of purchase price
- Selling costs: 6-8% of ARV (commissions + concessions)
- Holding costs: 2-4% of ARV (loan interest, taxes, insurance, utilities during rehab)
- Risk buffer: protection against cost overruns and market shifts
When to adjust the percentage
| Percentage | Scenario |
|---|---|
| 65% | Heavy rehab ($75K+), slow market, hard money financing, inexperienced investor |
| 70% | Standard rehab, average market, experienced flipper with conventional financing |
| 75% | Light cosmetic rehab, hot market, cash buyer, fast timeline |
| 80% | Rental buyers (no resale), turnkey properties, institutional buyers |
For a deeper dive into MAO variations by strategy, see our complete MAO guide.
Related tools and guides
- ARV Calculator -- calculate your ARV first
- Wholesale Profit Calculator -- estimate your net assignment fee
- Rehab Cost Estimator -- estimate repair costs by category
- MAO Calculator Walkthrough
For informational purposes only. Results are estimates based on the inputs you provide and are not an appraisal, broker price opinion, or investment advice. Actual values, costs, and returns vary by market, property condition, financing, and other factors. Consult a licensed appraiser, broker, accountant, and/or attorney before making investment decisions.