Wholesale Real Estate MAO Calculator
Maximum Allowable Offer (MAO) is the highest price a wholesaler can offer and still profit after assigning to a fix-and-flip end buyer. The standard 70% rule: MAO = (ARV × 70%) − rehab cost − assignment fee.
The 70% Rule Explained
The 70% rule sets the maximum offer at 70% of the After Repair Value, minus the rehab cost. This 30% buffer covers the flipper's profit margin (typically 10-15%), selling costs (8-10%), holding cost (5%), and unexpected overruns. Wholesalers then subtract their assignment fee from this MAO to find their cap.
When To Adjust The Percentage
60% in cooling markets, hot tertiary cities where ARV may slip, or properties needing structural repairs (uncertain rehab cost). 75% in stable rental markets, properties near job centers, or when interest rates are low (flipper holding cost is cheap).
Common MAO Mistakes
Overestimating ARV by using listing prices not actual closed comps. Underestimating rehab by 30-50% (always add 20% contingency). Forgetting selling costs (Realtor commission, transfer tax, closing). Inexperienced wholesalers usually lose deals because their MAO is too high — the flipper rejects.
Source: BiggerPockets Wholesale Investing Guide 2025, REI Network Best Practices. Last updated: May 2026.