Maximum Allowable Offer (MAO)
The most an investor should pay for a property and still hit margin: typically (ARV × 70%) − repairs, minus any wholesale fee.
The Maximum Allowable Offer is the ceiling price that protects your profit on a flip or wholesale deal. The common formula is the 70% rule: MAO = (ARV × 70%) − repair costs, with a wholesale fee subtracted if you're assigning the contract.
The percentage is a margin buffer, not a law — hot markets may justify 75%, riskier ones 65% or lower. The point is to never pay above the number that leaves enough room for repairs, holding, selling costs, and profit.
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