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Maximum Allowable Offer (MAO) Calculator
Maximum allowable offer (MAO) is the highest price you can pay for a flip and still hit your target profit. It works backward from after-repair value: multiply ARV by your buy percentage (commonly 70%), then subtract rehab costs. Lowering the percentage builds in more margin; raising it lets you bid more in competitive markets.
MAO = (ARV × Buy %) − Estimated Rehab Costs
How it works
MAO is the 70% rule made flexible. Instead of locking the multiplier at 70%, you set the buy percentage to match your market, financing, and risk tolerance — a tighter 65% for heavy rehabs or slow markets, a looser 75% when you have cheap capital and strong comps.
The number you get is a ceiling, not a target. Offering below your MAO widens your margin and your cushion against surprises. Treat MAO as the line you don't cross, then negotiate down from there.
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Get started freeFrequently asked questions
- What is the maximum allowable offer (MAO)?
- MAO is the most you can pay for a property and still earn your desired profit after all costs. It's calculated by multiplying the after-repair value by a buy percentage (often 70%) and subtracting rehab costs. Paying above MAO eats into or eliminates your margin.
- How is MAO different from the 70% rule?
- The 70% rule fixes the multiplier at 70%. MAO is the same formula but with an adjustable percentage, so you can tune the buffer to your market, financing, and rehab risk — using, say, 65% or 75% instead of a flat 70%.
- What buy percentage should I use for MAO?
- 70% is the common default. Use a lower percentage (65% or less) for heavy rehabs, slower markets, or expensive financing to protect your margin; a higher percentage (up to ~75–80%) may work for light cosmetic flips in hot markets with cheap capital and reliable comps.