MAO Formula for Wholesalers: How to Calculate Your Maximum Allowable Offer
A breakdown of the 70% rule for calculating MAO, why manual math costs wholesalers deals, and how Artemis automates it.
July 3, 2026
If you're wholesaling and you don't know your MAO before you get on the phone with a seller, you're negotiating blind. Here's the formula, why it matters, and where most wholesalers lose money doing it by hand.
What Is MAO?
MAO stands for Maximum Allowable Offer — the highest price you can offer a seller and still make your target profit once you factor in repairs and resale value. It's the single most important number in a wholesale deal, because it's what keeps you from locking up a contract you can't actually assign for a profit.
The 70% Rule Formula
The standard formula wholesalers use:
MAO = (ARV × 70%) − Repair Costs
Where:
- ARV = After Repair Value (what the property will sell for once fully renovated)
- 70% = the rule-of-thumb margin that covers your assignment fee, the investor's profit, and a buffer for unexpected costs
- Repair Costs = your estimate of what it takes to get the property to that ARV condition
Example:
- ARV: $200,000
- Repair costs: $30,000
- MAO = ($200,000 × 0.70) − $30,000 = $110,000
That $110,000 is the most you should offer the seller — anything higher and you're squeezing your own assignment fee or your buyer's profit margin.
Why the 70% Rule Isn't Always Exactly 70%
The 70% figure is a starting point, not a law. Some wholesalers adjust it based on:
- Market conditions — hotter markets with fast resale might support 75%
- Deal size — larger, higher-ARV deals sometimes use a tighter percentage since dollar-value buffers matter more than percentage buffers
- Buyer relationships — if you have a reliable cash buyer who moves fast, you may have more room to negotiate
The formula is a floor for discipline, not a ceiling for creativity. The number that actually matters is whether your buyer will take the deal at the price you're assigning it for.
Where Wholesalers Get This Wrong
Three mistakes show up constantly when this math is done manually or under pressure:
- Guessing ARV without real comps. An eyeballed ARV that's off by $20,000 changes your MAO by $14,000 at the 70% rule. That's the difference between a profitable assignment and a deal that sits.
- Underestimating repairs. Repair estimates done from a drive-by or a few photos are almost always low. Foundation issues, roof age, and electrical/plumbing problems hide easily.
- Doing the math live, on the phone. Sellers can hear hesitation. Wholesalers who are calculating MAO in their head while talking either lowball out of caution or overpay out of pressure to close the call.
How Artemis Handles This
Artemis's MAO calculator runs the formula live as you enter your ARV and repair estimate on a deal — no separate spreadsheet, no mental math while a seller's on the line. You get your number before the conversation starts, not during it.
Paired with AI deal notes, Artemis reads the deal's own numbers — ARV, repair cost, asking price, MAO — and returns a summary that includes Key Strengths, Red Flags, and a Recommended Offer. It's not a gut check. It's a structured read of the deal before you make a decision.
Bottom Line
The 70% rule is simple math, but simple math done wrong — or done live under pressure — costs real money. Knowing your MAO before you dial is what separates wholesalers who protect their margin from ones who talk themselves into bad deals.