Maximum Allowable Offer Calculator

Your maximum allowable offer is the highest price you can pay for an investment property and still hit your profit target. Set your after-repair value, repair costs, desired profit, holding costs and closing costs, and the calculator shows the offer ceiling, your total expenses and your profit margin, plus a verdict on whether the deal is worth doing. Or switch to the classic 70% rule mode and get MAO = ARV x 70% minus repair costs from just two inputs.

Quick Answer

How to use the maximum allowable offer calculator

Pick a mode first. In line-item mode (the default), enter all five numbers honestly, then click Calculate. In 70% rule mode, only the after-repair value and repair costs are used; the profit, holding and closing fields are hidden because the formula's 30% holdback stands in for them. Results stay hidden until you click, and the tool reads each deal on the same scale: negative or zero MAO is a warning, under 10% margin is low, 10 to 20% is moderate, and 20% or more is strong.

1. After Repair Value: pull recently sold comparable homes in similar condition, not active listings. If your ARV is a guess, the whole answer is a guess.
2. Repair Costs: include labor, materials, permits and a contingency, typically 10 to 20% on top for surprises that appear once walls are opened.
3. Desired Profit: your target in dollars. The margin shown is this amount divided by the ARV, so $30,000 on a $300,000 ARV reads as 10%.
4. Holding Costs: taxes, insurance, utilities and HOA dues for every month you expect to own the property. A six-month flip at $1,700 a month is $10,200 of pure overhead.
5. Closing Costs: agent commissions, title, escrow and transfer taxes. Count both transactions on a flip, not one.

When you are screening a rental instead of a flip, the profit logic changes: run the property through the buying rental property calculator to see the cash-flow side of the same numbers. And because closing costs bite twice, size them properly with the closing cost percentage calculator before you plug them in here.

How the maximum allowable offer is worked out

The calculator uses the line-item MAO: start from what the finished property is worth, then subtract every dollar the deal must absorb. What is left is the most you can offer.

The famous 70% rule is a shortcut for the same idea: MAO = (ARV × 70%) − repair costs, where the 30% you hold back covers profit, holding and selling costs in one lump. This calculator offers both: the dedicated 70% rule mode for a fast screen, and the line-item mode that prices each cost separately, which is why experienced investors prefer line items once they have real numbers. On the $300,000 worked example the two agree by construction: the 70% rule's $90,000 holdback equals the $71,000 of implied profit (30% × ARV, minus the $10,000 holding and $9,000 closing costs) plus those costs, so both modes land on an MAO of $165,000 when the line items match the holdback. HUD's guidance for buyers of fixer-uppers makes the same point from the other side: never commit to a price before the full cost of ownership is on paper.

Worked example: $300,000 ARV, $45,000 in repairs

The pre-filled deal is a $300,000 after-repair value, $45,000 in repairs, a $30,000 target profit, $10,000 in holding costs and $9,000 in closing costs. Every line below is what the calculator returns for it, plus two variations readers ask about most.

Run the same worked example in 70% rule mode and the tool returns $165,000.00: 70% of the $300,000 ARV is $210,000, minus the $45,000 in repairs, with the $90,000 holdback standing in for profit, holding and closing costs. Notice the third row: a 40% margin looks great on paper, but the MAO is negative, so the deal cannot work at all. Margin alone never validates a deal; the offer ceiling does. That is exactly the trap the old 70% rule avoids by construction, and why this calculator flags a negative MAO first, before any margin reading.

What competing calculators get wrong

Most pages ranking for this keyword give you a shortcut and call it an analysis. A few specifics:

• The 70%-rule-only tools: nearly every free MAO calculator on the first page of results hard-codes MAO = (ARV × 70%) − repairs and offers nothing else. Fine for a first filter, but the 30% holdback hides your actual profit, holding and closing costs, and you never learn whether the deal clears your real target. This page runs the 70% rule as one mode and prices each cost separately in the other.
• No margin readout: competitors return a single dollar number. They never tell you what margin your target profit implies, so you cannot compare two deals with different ARVs. This calculator reports profit margin and labels it.
• No deal verdict: nobody else flags the negative-MAO deal that looks profitable on margin alone, the way the third worked example above shows.
• The gap this page fills: both methods in one tool: the classic 70% rule for a fast screen, and line-item costing with holding and closing costs broken out, a margin percentage, and a four-tier verdict, with every number on the page reproducible in the tool above.

Getting each cost right

The formula is simple; the inputs are where deals die. A note on each one, with HUD's homebuying resources as background on the purchase side of every deal.

ARV: use sold comparables, ideally within a mile and within the last 3 to 6 months, adjusted for condition and square footage. Listing prices are hopes, not data. HUD's 203(k) rehabilitation program shows how seriously lenders take after-rehab value: the loan amount is capped by the lesser of the pre-rehab value plus rehab cost or 110 percent of the appraised value after rehab, so your ARV estimate should be an appraiser-grade number, not a hunch. When you are still choosing how to finance the purchase, the home loan approval calculator shows what a lender will actually let you borrow, which caps what the deal can be. The CFPB's homebuying guide walks through the same affordability factors a lender weighs.

Desired profit: this is where market reality sets your target. ATTOM's Q2 2026 U.S. Home Flipping Report put the typical gross flip return at 21.5%, down from 27.6% a year earlier, and those figures exclude rehab and carrying costs, so most flippers now aim for at least 20% of ARV as a comfort zone. The SEC's investor guidance makes the broader point: understand the risks and fees of any investment before you commit money to it. And the target is pre-tax: the IRS taxes your gain when you sell, so your margin needs to survive the tax bill too.

Repairs: walk the property with a contractor, or at minimum price labor and materials per room. Add a 10 to 20% contingency. New investors almost always underestimate the first rehab.

Holding costs: this is the line beginners forget entirely, and it is often the biggest one: mortgage or hard-money interest, taxes, insurance and utilities for every month of the project, including the months it sits listed for sale.

Closing costs: the IRS treats most acquisition costs as part of your investment basis rather than a deductible expense, which is another way of saying they are real money that lowers your return; count them on both ends of the flip, and see the CFPB's breakdown of what closing costs include so nothing is missed. For rent screening on the same property, the 40x rent rule calculator is the quick filter landlords actually use.

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