Maximum allowable offer (MAO) calculator
What to offer the seller, and what your buyer will pay. Enter the after-repair value and repairs; set the percentage your buyers work to and your assignment fee.
These are example numbers so you can see how it works — replace them with your deal.
ARVSignal provides investor estimates for educational and underwriting purposes. They are not appraisals, are not USPAP-compliant, and are not valuations for lending. The calculator works only from the numbers you enter.
Don’t know the ARV?
ARVSignal finds the comps, rejects the bad ones and shows you why — then works out the offer. 7-day free trial, 5 analyses.
How it works
A wholesale offer is worked backwards from what the end buyer — usually a flipper — can pay. They buy at a percentage of the after-repair value, less the repairs they will have to do. Your fee comes out of that, and what is left is the most you can offer the seller.
Buyer price = ARV × buyer % − repairs
Maximum allowable offer = buyer price − assignment fee
Opening offer = maximum offer × (1 − opening discount), rounded to $500
The buyer percentage is the lever that matters most. 70% is the familiar starting point, but it is a convention, not a law: buyers pay a higher percentage where houses sell fast and margins are thin, and a lower one where they sit. Use the percentage your actual buyers have been closing at.
The opening offer is where you start the conversation; the maximum is where you stop. Keeping them apart gives you room to negotiate without negotiating away your fee.
A worked example
A house with an ARV of $300,000 needs $85,000 of work. Your buyers pay 70% of ARV and your fee is $15,000.
- Buyer price: $300,000 × 70% − $85,000 = $125,000
- Maximum allowable offer: $125,000 − $15,000 = $110,000
- Opening offer, 5% under: $104,500
If the seller is asking $100,000, contracting at asking leaves a $25,000 spread — more than your fee, so the deal works with room to spare.
Common mistakes
- Using list prices as the ARV
- ARV comes from what renovated houses nearby actually sold for, not from what sellers are asking. An inflated ARV inflates every number below it.
- Taking the 70% from a book
- The percentage is whatever your buyers really pay in this market at this price point. Check it against their last few purchases.
- Rounding repairs down
- Every dollar you leave out of repairs is a dollar your buyer will take off their price — and so off your fee.
- Opening at your maximum
- If your first number is your last number, any counter-offer comes out of your fee.
Questions
›What is the maximum allowable offer (MAO)?
It is the highest price you can pay a seller and still leave room for your end buyer’s costs and profit and for your own fee. For a wholesale deal it is ARV times the buyer’s percentage, minus repairs, minus your assignment fee.
›Is the 70% rule always right?
No. 70% of ARV minus repairs is a common starting point, not a rule of the market. Buyers pay more than 70% in fast, competitive markets and on cheaper houses, and less in slow markets or on expensive ones. Use the percentage your own buyers pay.
›What assignment fee should I use?
Use the fee you normally earn. The calculator starts at $10,000 as a placeholder so the numbers are not blank; replace it with your own figure.
›What if the maximum offer comes out negative?
Then no offer supports those numbers: the repairs and fee exceed what a buyer would pay. The calculator shows the negative figure rather than rounding it up to zero.
More free calculators
- Flip calculatorProfit on a fix-and-flip after financing, holding and selling costs — or the most you can pay.
- BRRRR calculatorHow much cash the refinance returns, and whether the rent carries the new loan.
- Rehab calculatorA first-pass repair budget from living area, state and level of work.
- ARV calculatorAfter-repair value from comps you choose, with the range they imply.