What Is Maximum Allowable Offer?
MAO is the highest price an investor should pay for a fix-and-flip property to hit their target profit, calculated from the after-repair value, renovation costs, and desired margin.
Formula
MAO = (ARV × Target Rule %) − Rehab Cost
Example
Using the 70% rule on a $310,000 ARV with $40,000 in rehab costs: MAO = ($310,000 × 0.70) − $40,000 = $177,000.
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