What is maximum allowable offer (MAO)?
The most a wholesaler can pay and still leave their buyer a profit: ARV × the buyer's % − repairs − the wholesale fee.
Why it matters to an investor
MAO keeps you from overpaying. It is the highest price at which the deal still works for you and for the buyer you plan to sell to.
How investors use it
- Start with ARV × your buyer's percentage.
- Subtract repairs and your fee.
- Open your offer below the MAO so you can negotiate up.
Questions
What percentage do I use in the MAO formula?
Flippers often pay around 65% to 70% of ARV, landlords 75% to 80%. Your buyers decide.
Is MAO the same as the 70% rule?
The 70% rule is one way to set the percentage in the MAO formula.
How we make these guides
Written by the LeadCounty editorial and data team from official county, court and state sources and our own weekly counts. We name the office behind every number, say what we cannot see, and fix mistakes when you tell us. See our editorial standards and methodology. General information, not legal or financial advice. Refreshed weekly.
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