Maximum Allowable Offer Calculator
What is the maximum purchase price under a chosen investor rule?
MAO = (ARV × Rule Percentage) − Rehab Cost
Calculate Max Offer →Quick Screening Inputs
Results update as you change any input.
An investor benchmark, not a valuation method — change the percentage or pick a preset. There is no single correct value for every deal.
Estimates are for educational purposes only · Not investment advice
Maximum Allowable Offer
The 70% rule is a simplified screening formula commonly used by some real-estate investors. It attempts to leave room for renovation, holding, financing, selling costs and profit, but actual project economics vary significantly.
Together these two pieces make up your 70% of ARV ($280,000) — the total budget the rule allows for purchase plus rehab.
Compare Rules
| Investor Benchmark | Estimated MAO |
|---|---|
| 65% | $200,000 |
| 70% | $220,000 |
| 75% | $240,000 |
This shows how sensitive the maximum offer is to the rule percentage chosen — a few points can shift the answer by tens of thousands of dollars.
Rehab Sensitivity
| Rehab Scenario | Estimated MAO |
|---|---|
| Entered Budget | $220,000 |
| +10% | $214,000 |
| +20% | $208,000 |
Full Underwriting MAO
More sophisticated than the 70% rule: solves backward through financing, holding period and real selling costs for a target profit or return, instead of one fixed percentage of ARV.
Educational Use Only: Reaixo provides estimates and scenario calculations for informational and educational purposes. Reaixo is not acting as a real-estate broker, appraiser, lender, contractor, financial advisor, accountant, tax advisor, or investment advisor. ARV, repair costs, financing costs, selling expenses, rents and investment performance can vary materially. The 70% rule is a simplified heuristic and is not appropriate for every property, market, investor, or transaction. Calculator results are not an appraisal, investment recommendation, offer recommendation, or guarantee of profit.
Want a More Complete Analysis?
The MAO formula is only a quick screening tool. A full flip analysis should include financing, holding costs, acquisition expenses, selling costs and profit targets.
Run Full Fix-and-Flip Calculator →The Formula This Calculator Uses
The rule takes a percentage of ARV as your total budget for purchase plus rehab, then backs out the rehab cost to leave the maximum you can pay for the property itself:
Why Your ARV Estimate Matters as Much as the Rule
The Compare Rules and Rehab Sensitivity tables above show how much the rule percentage and rehab budget can move your number — but ARV itself is also just an assumption. Using your entered rehab cost and 70% rule:
- At your entered ARV ($400,000): Maximum Allowable Offer = $220,000.
- If ARV comes in 10% lower ($360,000): Maximum Allowable Offer drops to $192,000 — a swing of $28,000.
Because ARV is squared away first and then multiplied by the rule percentage, even a modest miss on your resale estimate moves the maximum offer by a similar percentage — often a bigger swing in dollars than adjusting the rule percentage itself. Stress-test your ARV assumption, not just the rule you're using.
Worked Example
$400,000 ARV, 70% rule, $60,000 estimated rehab cost:
MAO = ($400,000 × 70%) − $60,000 = $280,000 − $60,000 = $220,000
Frequently Asked Questions
Is the 70% rule always the right rule to use?
No. It's a simplified heuristic some investors use as a first screening pass. Appropriate percentages vary by market, project scope, financing cost and investor risk tolerance — many experienced flippers use a different number, or none at all, for a given deal.
Why does the Maximum Allowable Offer change so much between 65% and 75%?
A 10-point swing in the rule percentage is a swing of 10% of your ARV — often tens of thousands of dollars. That sensitivity is exactly why the Compare Rules table is shown: it demonstrates how much a "quick rule" can move the answer.
Is MAO the same as an appraisal or an offer I should make?
No. It's a scenario screening number based on the ARV, rehab cost and rule percentage you entered — not an appraisal, and not a recommended or guaranteed offer price.
What should I do after getting a Maximum Allowable Offer number?
Treat it as a quick screen. For a property that clears this bar, running the full Fix-and-Flip Calculator accounts for financing, holding and selling costs the 70% rule doesn't itemize.
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Helpful Resources
Educational Use Only: Reaixo provides estimates and scenario calculations for informational and educational purposes. Reaixo is not acting as a real-estate broker, appraiser, lender, contractor, financial advisor, accountant, tax advisor, or investment advisor. ARV, repair costs, financing costs, selling expenses, rents and investment performance can vary materially. The 70% rule is a simplified heuristic and is not appropriate for every property, market, investor, or transaction. Calculator results are not an appraisal, investment recommendation, offer recommendation, or guarantee of profit.