Maximum Allowable Offer (MAO) Calculator

How this calculator works

Your maximum offer is the price that still leaves your profit target after every cost. Working backward this way keeps you from paying too much on the way in, which is where most flip profit is made or lost.

The 70% rule (70% of ARV minus repairs) is a common shortcut. It is shown separately because it ignores your actual financing, holding and selling costs.

Maximum offer = (ARV − selling − rehab with contingency − holding − financing − profit − fixed buying costs) ÷ (1 + buying cost %).

Worked example

Example values are illustrative, not quotes or market data. These are the numbers the calculator above starts with.

Inputs

After-repair value (ARV): $300,000
Selling costs (% of ARV): 6%
Rehab budget: $50,000
Rehab contingency: 10%
Holding costs per month: $900
Months held: 6
Financing costs (points, fees, interest): $12,000
Buying closing costs (% of purchase): 2%
Profit target as: Dollar amount
Profit target: 30000

Results

Maximum offer: $176,078
70% rule shortcut: $160,000

Common questions

Is the 70% rule accurate?

It is a quick screen. Real costs differ by deal, so use the full formula before making an offer.

How do I estimate ARV?

From recent sales of renovated homes similar to what yours will be after the work.

What profit should I target?

Enough to cover your risk and time. Many investors set a dollar minimum and a percent of ARV.

Related calculators

Estimate only. Actual loan terms, eligibility, insurance, taxes, and settlement charges require verification. These are planning estimates, not a lender Loan Estimate, Closing Disclosure, appraisal, or approval. Michael O'Neal is a real estate broker, not a lender, appraiser, attorney or tax adviser.