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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
60% (conservative) 85% (aggressive)
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