What Is MAO in Real Estate Wholesaling?

MAO — Maximum Allowable Offer — is the highest price you can pay for a property and still make a profit. Every wholesaler needs to know this number before making any offer.

The MAO Formula

MAO = (ARV × Deal Percentage) − Rehab Costs − Wholesale Fee

Where:

ARV = After Repair Value (what the property is worth fully renovated)
Deal Percentage = 65% for wholesale, 70% for fix-and-flip
Rehab Costs = estimated cost to fully renovate the property
Wholesale Fee = your assignment fee (typically $5,000–$20,000+)

MAO Example

Let's walk through a real example:

ARV: $180,000
Rehab: $30,000 (medium renovation)
Wholesale fee: $10,000
Deal %: 65% (wholesale)

MAO = ($180,000 × 0.65) − $30,000 − $10,000
MAO = $117,000 − $30,000 − $10,000
MAO = $77,000

You should not pay more than $77,000 for this property if you want to wholesale it profitably.

Why 65%?

The 65% rule for wholesale deals exists to protect your end buyer's margin. A cash buyer or flipper buying from you needs room to:

Pay for holding costs (insurance, utilities, taxes) during the flip
Pay closing costs on both the buy and sell side
Account for cost overruns on the rehab
Make a profit of at least 15–20% of ARV

If you buy at 65% of ARV minus rehab, your buyer has a workable deal. If you push to 75–80%, you'll struggle to find a buyer.

MAO vs. Assign Price

Many wholesalers confuse MAO and assign price. Here's the difference:

MAO = the most you'd offer the seller (includes your fee baked in)
Assign Price = what you charge your end buyer (MAO + your fee)

Example: If MAO is $77,000 and you want a $10,000 fee, your assign price is $87,000. You lock the property under contract at $77,000 and sell your contract to an investor for $87,000.

Adjusting MAO by Exit Strategy

Strategy	Deal %	Why
Wholesale	65%	Leaves room for buyer profit + your fee
Fix & Flip	70%	Buyer is doing the work, slightly more room
Rental / BRRRR	75%	Buyer holding long-term, less flip risk

The Biggest MAO Mistake

The #1 mistake wholesalers make is inflating the ARV to make the MAO look better than it is. If your ARV is off by $20,000, your MAO is off by $13,000 — and your deal falls apart when your buyer does their own comps.

Always be conservative with ARV. It's better to lowball the ARV and have the deal hold up than to overstate it and lose a buyer.

Calculate MAO Instantly

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