Free MAO Calculator
Calculate the Maximum Allowable Offer for a real estate deal using the 70% rule or a custom profit target.
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Maximum Allowable Offer
$160,000
Estimated Profit at MAO$90,000
Total Project Cost at MAO$210,000
Purchase as % of ARV53.3%
Profit Margin (% of ARV)30.0%
Maximum Allowable Offer vs After Repair Value (ARV)
Maximum Allowable Offer (MAO)
The MAO is the highest price you should pay for an investment property to achieve your target return.
The 70% Rule
MAO = ARV x 70% - Rehab Costs
This leaves a 30% buffer for profit, selling costs, and holding costs. Experienced investors may adjust the percentage based on the deal.
Adjusting the Percentage
Wholesale Adjustment
If buying from a wholesaler, subtract their assignment fee from the MAO to keep the deal profitable.
Example Calculation
ARV $300,000, rehab $45,000, 70% rule, no wholesale fee, $5,000 buying closing costs.
- 01ARV target: $300,000 x 70% = $210,000
- 02MAO: $210,000 - $45,000 - $0 - $5,000 = $160,000
- 03Total project cost at MAO: $160,000 + $45,000 + $5,000 = $210,000
- 04Estimated profit: $300,000 - $210,000 = $90,000
- 05Purchase as % of ARV: $160,000 / $300,000 = 53.3%
- 06Profit margin: $90,000 / $300,000 = 30.0%