Free MAO calculator
(70% rule)
Find your maximum allowable offer from ARV, repairs and your assignment fee. Works for wholesale deals and flips.
Calculate your maximum allowable offer
MAO = ARV × 70% − repairs − your fee. Change any number and this 70% rule calculator updates the offer as you type.
What is MAO in real estate?
MAO stands for maximum allowable offer: the most you can pay for a property and still make your target profit after repairs and costs. Investors work it out from the after repair value (ARV), usually with the 70% rule: 70% of the ARV, minus repairs, minus any wholesale fee.
It is a ceiling, not an opening bid. Wholesalers use it to decide what to put a property under contract for, because their cash buyer will run the same math before taking an assignment of the contract. Flippers use it to decide whether a deal is worth doing at all.
The MAO formula
MAO = (ARV × 70%) − repair costs − assignment fee
For a flip, leave the assignment fee out. For a wholesale deal, subtract it, because your fee has to come out of the same 30% your end buyer needs for their own costs and profit.
Worked example
| After repair value | $250,000 |
|---|---|
| 70% of ARV | $175,000 |
| Minus repairs of $40,000 | $135,000 |
| Minus your $10,000 assignment fee | $125,000 |
Your maximum allowable offer is $125,000. A flipper running the same deal with no fee can pay up to $135,000.
What is the 70% rule in real estate?
The 70% rule says an investor should pay no more than 70% of a property's after repair value, minus the cost of repairs. The other 30% of the ARV covers buying and selling costs, holding costs and financing, and leaves room for profit. It is a quick screening rule, not a full deal analysis.
What the 30% covers
On a $250,000 ARV, the 30% is $75,000. It has to pay closing costs when you buy and when you sell, agent commissions, loan interest and fees, and insurance, taxes and utilities while you hold the house, and still leave a profit. That is why you do not subtract those costs again when you use the 70% rule: they are already inside the 30%.
The 70% rule for house flipping
Flippers apply it directly: 70% of the ARV minus repairs is the most they will pay. On the example deal that is $135,000. If the seller wants more, the flip only works with a higher ARV, lower repairs or a thinner margin.
The 70% rule for wholesaling
Wholesalers start from the same number, then subtract their assignment fee, because they are assigning the contract for a fee to a flipper or landlord who will apply the rule themselves. If you put the house under contract at $125,000 and assign it for $10,000, your buyer pays $135,000 all in, which is their 70% number.
65%, 70%, 75% or 80% of ARV: which to use
70% is a starting point. Investors move it depending on price point, market speed and how much risk is in the repairs.
| Rule | MAO on the example | When investors use it |
|---|---|---|
| 65% | $112,500 | Cheap houses, heavy rehabs and slow markets |
| 70% | $125,000 | The standard starting point |
| 75% | $137,500 | Higher-priced houses, light rehabs and fast markets |
| 80% | $150,000 | Expensive markets, where fixed costs are a small share of the price |
Example deal: $250,000 ARV, $40,000 repairs and a $10,000 assignment fee. Each 5 points moves the offer by $12,500.
Does the 70% rule still work?
Yes, as a first filter. It breaks down at the edges. On cheap houses the 30% cushion is too small in dollars to cover fixed costs, and on expensive houses it is more than most deals need, which is why investors in high-priced markets often work at 75% or 80%.
It also assumes your inputs are right. The percentage only protects you if the ARV and the repair budget are sound. An ARV built on the wrong comps, or a repair budget that misses the roof, breaks the deal at any percentage.
Using it as a wholesaling calculator
Used as a wholesale real estate calculator, it answers one question: the most you can put a property under contract for. Enter the after repair value, the repairs your end buyer will budget for, and your assignment fee. The result still leaves your buyer their 70% number.
Run it before you talk numbers with the seller. If the seller's price is above your MAO, the deal needs a lower price, a smaller fee, or a buyer who works at a higher percentage.
Getting your ARV and repairs right
Every MAO calculator, this one included, is only as good as the two numbers you type in. The ARV should come from recent sales of similar houses nearby that sold in renovated condition. The repair budget should be itemized, not a round guess.
That is the part Propera does. Enter an address and it pulls sold comps, checks each sale price against multiple sources, including public records and MLS data, and grades every comp by the condition it sold in. It builds an itemized repair estimate from your description of the house, then applies your own offer formula.
Questions people ask
What is the 70% rule in wholesaling?
It is the rule that a property's maximum allowable offer is 70% of its after repair value, minus repairs. Wholesalers also subtract their assignment fee, so the end buyer still gets a price that fits their own 70% math. On a $250,000 ARV with $40,000 of repairs and a $10,000 fee, that is an offer of $125,000.
What does 75% ARV mean?
It means 75% of the after repair value: $187,500 on a house worth $250,000 once it is fixed up. Investors use 75% as a looser version of the 70% rule in higher-priced or faster markets. Lenders frame the same idea as loan-to-value measured against the ARV, often called after-repair LTV: a fix-and-flip lender capped at 75% after-repair LTV lends no more than $187,500 on that house.
How do you calculate the 70% rule?
Multiply the after repair value by 0.7, then subtract the repair costs. For a $250,000 ARV and $40,000 of repairs, $250,000 times 0.7 is $175,000, and $175,000 minus $40,000 is $135,000. Wholesalers then subtract their assignment fee from that figure.
Is MAO the same as the 70% rule?
Not quite. MAO, the maximum allowable offer, is the result: the most you can pay. The 70% rule is the most common way to work it out. Some investors calculate MAO from a full list of costs and a target profit instead of a percentage, and both methods aim at the same number.
Does the 70% rule include closing and holding costs?
Yes. The 30% you hold back covers buying and selling costs, holding costs, financing and profit. If you also subtract those costs from the 70% figure, you count them twice and underbid. If you would rather list every cost yourself, start from 100% of the ARV instead of 70%.
How much should I pay for a house to flip?
No more than your maximum allowable offer. Under the 70% rule that is 70% of the after repair value minus repairs, so a house worth $250,000 once fixed up that needs $40,000 of work supports an offer of up to $135,000. Offer below that to leave room to negotiate.
What is the golden rule for flipping houses?
It usually means the 70% rule: never pay more than 70% of the after repair value, minus the cost of repairs. It is a rule of thumb because it is a fast filter, and investors adjust the percentage for their market and price point.
What if I don't know the ARV yet?
Then the MAO cannot be trusted yet, because every other number hangs off it. ARV comes from recent sales of similar, renovated houses nearby. Propera pulls those comps from an address, checks each sale price against multiple sources, including public records and MLS data, and gives you the ARV, an itemized repair estimate and an offer together. Your first underwrite is free.
Get the ARV and repairs from the address
Propera turns an address into verified comps, an itemized repair estimate and an offer on your own formula. Your first underwrite is free. No card required.
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