Maximum Allowable Offer (MAO): How to Calculate It
Updated June 17, 2026
Maximum allowable offer (MAO) is the highest price you can pay for a property and still hit your profit target. The full formula is MAO = ARV − repairs − holding costs − closing costs − your desired profit (and, for wholesalers, the assignment fee). It's a more precise cousin of the 70% rule: instead of bundling costs into one percentage, MAO itemizes them.
The 70% rule gives you a fast ceiling; the maximum allowable offer gives you an accurate one. MAO is what you get when you stop hiding your costs inside a percentage and instead subtract each one explicitly — repairs, holding, closing, profit, and a wholesaler's fee.
The trade-off is effort. MAO takes more inputs than the 70% rule, but it's far more honest about a specific deal because it uses your real numbers instead of a market-average convention. This guide breaks the formula apart line by line and shows how it relates to the rule of thumb most investors start with.
The full MAO formula
Maximum allowable offer = ARV − repair costs − holding costs − closing costs − desired profit. If you're wholesaling, you subtract your assignment fee as well, because the end buyer still needs to hit their own MAO after paying you. Every term is a real, estimable number for the specific property in front of you.
The discipline of MAO is that it forces you to name each cost. You can't wave at a 30% buffer; you have to estimate the rehab, the months of holding, the closing fees on both ends, and the profit you actually require to make the deal worth your time. That itemization is exactly why MAO is more accurate than a flat percentage.
| Component | Amount | How you estimate it |
|---|---|---|
| ARV | $300,000 | From comps |
| − Repairs | $50,000 | Walkthrough or per-sq-ft estimate |
| − Holding costs | $12,000 | Interest, taxes, insurance, utilities |
| − Closing costs | $15,000 | Buy + sell closing and commissions |
| − Desired profit | $40,000 | Your required return |
| = MAO | $183,000 | Highest price you can pay |
MAO worked through, $300K ARV deal
MAO versus the 70% rule
The 70% rule is a shortcut to MAO. When you multiply ARV by 70% and subtract repairs, you're implicitly assuming that holding, closing, selling, and profit all add up to 30% of ARV. Sometimes they do; often they don't. On a high-ARV property in a low-cost market, the true MAO is higher than the rule suggests, and you'd lose deals by under-bidding.
Use the 70% rule to screen fast — at a property, scrolling a list, on a call. Then run a full MAO before you actually commit, because that's where the real go/no-go lives. The rule gets you to a shortlist; MAO gets you to a number you'd sign your name to.
Turning MAO into offers at volume
On one deal you compute MAO by hand. Across a list of hundreds of properties, you encode it as a formula — your buy box — and let the system apply it. Each property gets comped, your itemized costs and profit get subtracted, and out comes a property-specific maximum offer without you touching a calculator a thousand times.
That's the point where deal analysis becomes a deal pipeline. Once every property on a list carries its own MAO, BILT CRM generates an LOI at or below that number and blasts it to the listing agent. The math you'd labor over on a single house becomes the rule that prices an entire campaign of offers.
Frequently asked
What is maximum allowable offer (MAO)?
MAO is the highest price you can pay for a property and still earn your target profit. The formula is MAO = ARV − repairs − holding costs − closing costs − desired profit, plus an assignment fee if you're wholesaling. It itemizes every cost rather than bundling them into a percentage like the 70% rule does.
How is MAO different from the 70% rule?
The 70% rule bundles holding, closing, selling, and profit into a flat 30% of ARV. MAO subtracts each of those costs explicitly using your real numbers. The rule is faster for screening; MAO is more accurate for the final go/no-go, especially when a deal's costs differ from the market average.
Do wholesalers calculate MAO differently?
Yes — a wholesaler subtracts their assignment fee on top of the end buyer's costs and profit, because the cash buyer must still hit their own MAO after paying you. That means a wholesaler's offer sits further below ARV than a flipper buying the same house to renovate themselves.
What profit number should I plug into MAO?
Use the minimum return that makes the deal worth your time and risk, not a dream number. For flips, many investors anchor to a dollar floor (for example, $30K–$50K net) or a percentage of ARV. The point of MAO is that profit is an explicit input you control, not a leftover.
The takeaway
MAO is the itemized, honest version of the 70% rule: ARV minus repairs, holding, closing, profit, and any assignment fee equals the most you can pay. Screen with the 70% rule, commit with MAO. Encode it as a buy box and BILT applies it across an entire list — turning your maximum offer into LOIs in the market.