Maximum Allowable Offer -- calculate both the standard 70% Rule MAO and a custom MAO based on your specific costs and profit target.
📍 Property Address (optional)
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InputsYour Numbers
Deal Parameters
After-Repair Value (ARV)?
$
Estimated Repair Costs?
$
Holding Costs ($)?
$
Closing Costs ($)?
$
Minimum Profit Required?
$
Pro Forma (Different Scenarios)
Higher Repair Budget?
$
Lower Minimum Profit?
$
As-Is AnalysisCurrent
Enter values to see results
70% Rule MAO
--
standard formula
Custom MAO
--
with your targets
75% Rule MAO
--
buy & hold version
Max Margin
--
at 70% rule MAO
MAO Calculation Methods
ARV--
70% of ARV--
Minus Repairs--
70% Rule MAO--
Custom MAO (Your Target)
ARV--
Repairs--
Holding Costs--
Closing Costs--
Minimum Profit--
Custom MAO--
Pro FormaAfter Plan
Enter pro forma values
MAO (High Repairs)
--
if repairs 25% over
MAO (Thin Margin)
--
lower profit target
MAO Range
--
low to high
Repair Buffer Needed
--
Scenario Analysis
Base Case MAO--
High Repair Scenario MAO--
Thin Margin MAO--
Your Negotiating Range--
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1
Enter the ARV
After-Repair Value is everything. Get this right first. Pull 3+ comparable sales within 1 mile, sold in the last 6 months, similar size and condition.
2
Enter Repair Budget
Be conservative. Add 15-20% to your contractor quote for contingencies. Material delays, hidden damage, and change orders are common.
3
Add Holding and Closing Costs
Every month you hold costs money -- interest, insurance, utilities, taxes. Closing costs on buy and sell sides both reduce your margin.
4
Set Your Minimum Profit
What is the least you will accept to make this deal worth your time? Enter that number. The calculator backs out your MAO from the profit goal.
5
Compare 70% vs Custom
The 70% Rule is a quick formula (70% of ARV minus repairs). Your Custom MAO uses your actual costs. In most markets, Custom MAO is more accurate.
6
Model the Worst Case
Enter higher repair costs in the pro forma. If the MAO still makes sense with 25% repair overrun, your deal has a margin of safety.
The Maximum Allowable Offer (MAO) is the highest price you can pay for a property and still hit your profit target. Working backwards from the outcome ensures you never overpay.
The 70% Rule is a shortcut: MAO = ARV x 70% - Repairs. It works because the 30% buffer roughly covers holding costs (5%), closing costs on both sides (5%), and leaves 20% gross profit margin. But it is a rule of thumb -- your actual costs may differ.
Custom MAO is more precise: MAO = ARV - Repairs - Holding Costs - Closing Costs - Minimum Profit. This uses your actual numbers and gives a more accurate maximum bid price.