The most honest number in real estate.
Offer too much and the deal won't sell to a flipper. Offer without knowing your number and you're guessing. Your Maximum Allowable Offer (MAO) is the most you can offer the seller after the buyer's economics and your fee. The Flip MAO form works it out from the ARV, repairs and the buyer's profit: your offer is built to close, your buyer makes money, and your fee is built in. Everybody eats.
Why it matters
- Everybody eats. The seller gets a number that closes, the buyer's profit is protected, the contractor gets a real budget, and you get your fee inside the deal.
- Get paid without pricing out your buyer. Your fee comes out of the ceiling, not on top, so you never price the buyer out to get paid.
- No offer showing? Check the boxes first. If a required field is empty, especially ARV or your assignment fee, there's no offer yet. A fee of $0 is fine, but an empty fee isn't. Once everything is filled in, an MAO of zero or below means the economics don't work for this exit.
Steps
- In the Deal calculator, scroll to the MAO form and choose Flip.
- Enter the ARV and Square footage.
- Pick a Condition: Turnkey, Minor Updates, Moderate Rehab, Full Rehab, Full Rehab + some of the Big 6, Gut Job or Tear Down.
- Leave Repairs blank to auto-estimate from condition and square footage, or type your own number to override it.
- Add any Add-ons: roof type, roof sqft, exterior cosmetics or other rehab.
- Enter the Buyer's target profit and Your assignment fee. Optionally add the Price you'd pay the seller.
- Read your maximum offer, then scroll to The MAO explained to walk the ledger step by step.
Good to know
- The math: ARV − closing (% of ARV) − repairs − holding (% of ARV) − buyer's profit = the buyer's ceiling. Ceiling − your fee = maximum offer.
- Example (percentages may differ on your screen): ARV $250,000; closing at 3.5% is $8,750; repairs $35,000 (Moderate Rehab, 1,400 sqft auto-estimate); holding at 3% is $7,500; buyer's profit $35,000. That leaves a ceiling of $163,750. Take out a $10,000 fee and the maximum offer is $153,750.
- Closing and holding percentages can differ by account settings. Use the ones shown on your screen.
- Nothing here is saved. It is a scratchpad, so save the property if you might make an offer.
- A better ARV gives a better MAO. Q-ARV gives you one you can defend.