Set a clear offer ceiling before negotiations. See both the house flipper’s maximum purchase price and the seller offer that remains after a wholesale fee.
Buyer MAO = ARV × rule % − repairs. Seller MAO = buyer MAO − wholesale fee.
WORKED EXAMPLE
At $300,000 ARV, a 70% rule, and $45,000 repairs, the buyer MAO is $165,000. Subtract a $10,000 wholesale fee and the seller offer ceiling is $155,000. A direct buyer can set the fee to zero.
What maximum allowable offer means
MAO is an underwriting limit produced by your assumptions, not a prediction of what the owner will accept. Enter a supportable renovated value and the repair budget needed to reach it. The rule percentage leaves a combined allowance for other costs and profit. The calculator then shows the buyer ceiling and the seller ceiling separately, so the wholesale fee does not get confused with the buyer’s margin.
Choose the allowance deliberately
The 70% default is a starting point rather than a universal market standard. A longer hold, expensive financing, higher selling costs, or a bigger required profit can justify a larger allowance and a lower rule percentage. A smaller allowance raises the offer ceiling but leaves less protection. Do not subtract itemized costs again if you already built them into the rule; use the itemized wholesale calculator when you need each cost stated explicitly.
Turn the ceiling into a negotiation plan
Recalculate after inspection findings, updated bids, or better comparables change the assumptions. Keep your maximum separate from your opening offer and from available cash. A deal can be below MAO yet still require more cash than you have because the lender may not fund all of the purchase and repairs. Pair this tool with the flip budget to check funding needs and the downside if the resale price falls.
A LITTLE MORE CLARITY
Frequently asked questions
What does MAO stand for in real estate?
MAO means maximum allowable offer: the highest modeled purchase price that fits your chosen value, cost, fee, and margin assumptions.
Can a direct buyer use this calculator?
Yes. Set the wholesale fee to zero. The seller and buyer ceilings will then be the same.
Why are there two offer amounts?
The buyer MAO is the rule-based acquisition ceiling before an assignment fee. The seller MAO deducts that fee to show the remaining contract-price ceiling.
