MAO Calculator & Deal Analyzer | 70% Rule
MAO Calculator: Find Your Maximum Allowable Offer
The MAO (Maximum Allowable Offer) is the highest price you can pay for a wholesale deal and still profit. Our calculator uses three proven percentage rules: 65%, 70%, and 75%. Choose your rule based on market conditions and deal type.
The Three Rules
- 65% Rule (Competitive Markets): MAO = (ARV × 0.65) − Repairs − Profit Margin. Use when buyers are scarce and you need speed.
- 70% Rule (Standard): MAO = (ARV × 0.70) − Repairs − Profit Margin. Use in normal markets for fix-and-flip deals.
- 75% Rule (Slow Markets): MAO = (ARV × 0.75) − Repairs − Profit Margin. Use when inventory moves slowly but you want higher volume.
When to Use Each Rule
| Rule | Market Type | Deal Type | Typical Strategy |
|---|---|---|---|
| 65% | Highly competitive | Wholesale (quick exits) | Buy cheap, sell fast, 5-10% profit on assignment |
| 70% | Normal/balanced | Fix-and-flip | Hold 3-6 months, 15-20% profit after repairs/holding |
| 75% | Slow moving | Rental/hold | Long-term hold, 10-15% annual return |
Get Started
Common Mistakes to Avoid
- Underestimating repairs: Add 15-20% contingency to contractor estimates
- Forgetting holding costs: Include insurance, property tax, and utilities while fixing
- Using wrong rule for market: 70% doesn't work everywhere—adjust for local conditions
- Ignoring ARV variance: Get 3+ comparable sales; average them for realistic ARV
Related Tools & Resources
- Motivated Seller Scorecard — Identify your best buyer targets first
- Direct Mail ROI Calculator — Verify your deal pipeline math
- Skip Trace Cost Estimator — Budget your data and outreach costs
- Full Guide: Beyond the 70% Rule — Detailed breakdown of all three rules by market
FAQ
- Why are there three different percentages?
- Market conditions change. Fast markets need lower offers (65%) to compete; slow markets can support higher offers (75%). Use the percentage that matches your situation.
- What happens if my repair estimate is wrong?
- Your MAO becomes too high and your profit shrinks. Always add 10-20% contingency to repair estimates and get multiple quotes.
- Can I use this for rentals?
- Yes. Use the 75% rule and target properties where cap rate exceeds 8% or payback period is under 15 years.
- How do I find ARV (After Repair Value)?
- Pull 3-5 recent comparable sales of similar properties in the same area. Average their sale prices for your ARV.
- Should I adjust the profit margin?
- Yes. Wholesalers typically target 5-10% ($5-10k per deal). Fix-and-flip investors target 15-25% ($30-50k+).