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MAO Calculator (70% Rule)
Maximum Allowable Offer — the formula every wholesaler uses to back into a winning offer price. Includes sensitivity tables, market-adjusted multipliers, and the worked math behind every dollar.
#mao#underwriting
MAO — 70% Rule Calculator
The formula
MAO = (ARV × 0.70) − Estimated Repairs − Your Assignment Fee
The 30% "discount" you bake in covers everything your end buyer (a flipper) needs to make the deal worthwhile:
- ~7% selling costs (commission + closing)
- ~3% holding costs (taxes, insurance, utilities for 4-6 months)
- ~5% financing (hard money points + interest)
- ~15% profit margin for the flipper
Worked example
- ARV: $200,000
- Repairs: $25,000
- Your fee: $10,000
- MAO: (200,000 × 0.70) − 25,000 − 10,000 = $105,000
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