ARV & MAO Calculator
Calculate After-Repair Value and Maximum Allowable Offer using the 70% rule. Size your offer before making it.
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Fix-and-Flip ARV & Maximum Allowed Offer (MAO) Calculator
The single fastest way to lose money on a flip is to overpay at the start. Everything downstream — the rehab, the financing, the sale — can go to plan, and the deal still loses if the purchase price left no room for profit. The Maximum Allowed Offer flips the usual question on its head. Instead of asking what a seller wants, it asks what you can pay and still walk away ahead. This calculator runs that math in reverse so you set your ceiling before you ever make an offer.
What ARV means and why everything hinges on it
After Repair Value is the estimated market price of the property once it is fully renovated. It is the anchor for the entire deal, because every number that follows is derived from it. ARV is established the same way an appraiser or agent prices any home: by pulling recently sold, comparable properties in the immediate area that are already in finished condition, then adjusting for size, layout, and lot. It is not the listing price of active homes, and it is not wishful thinking about what the neighborhood might become. A flip built on an inflated ARV is a loss waiting to be discovered at resale.
The 70% Rule in plain terms
The 70% Rule is the industry's quick screen for whether a deal is worth pursuing. It states that an investor should pay no more than 70% of the after-repair value, minus the cost of repairs.
The 70% figure is not arbitrary. The 30% gap between the purchase budget and the ARV is the cushion that absorbs everything the simple formula does not name explicitly: your profit, the holding costs while you own the property, the financing cost of the loan, the agent commissions and closing costs on the sale, and a buffer for the repairs that always run longer and cost more than the estimate. Pay more than the rule allows and you are spending that cushion before the project begins.
Why the percentage is a lever, not a law
Seventy percent is a benchmark, not a rule of physics. The right percentage depends on the deal and the market. In a hot, competitive market where good properties are scarce, experienced investors with cheap capital and reliable crews may stretch to 75% or even higher to win deals, accepting a thinner margin for higher volume. In a soft or unpredictable market, on a large or structurally risky rehab, or as a newer investor without a long track record of accurate estimates, dropping to 65% or lower builds in protection you will be glad to have. This calculator lets you move that percentage so you can see exactly how a few points change your maximum offer.
Reading the output
The Maximum Allowed Offer is the headline: the most you can pay for the property and stay within your margin. The budget figure shows the rule percentage applied to ARV — your total spend ceiling before repairs are subtracted. The built-in margin is the dollar cushion the rule reserves, and the margin-as-percent-of-ARV restates that cushion as a share of the finished value, which is the cleanest way to compare two very different deals. The cash-in-deal line adds your offer and repair budget together, the capital you are committing before any financing.
If the MAO comes back lower than the seller's asking price, that is the calculator doing its job. It is not telling you the deal is impossible; it is telling you what the deal needs to be. Either negotiate toward the MAO, find a way to lower the rehab, or walk. The discipline to walk from a deal that does not pencil is what separates investors who last from those who do not.
What the rule does not cover
The 70% Rule is a screening tool, not a full underwriting model. It does not itemize your holding costs, it does not model the cost of your specific financing, and it does not account for an unusually long timeline or a wholesale fee paid to whoever brought you the deal. For a quick yes-or-no on whether a property is worth a closer look, the rule is excellent. Before you actually buy, pair it with a detailed deal analysis that names every cost line by line — and stress-test it against a rehab that overruns and a sale that takes longer than you hope.
Where do I get an accurate ARV?
Pull sold comparables — not active listings — from the last three to six months, within roughly half a mile, of similar size and style, that are already renovated to the standard you plan to deliver. A local agent who works with investors can run these quickly, and many will do it to earn the eventual resale listing. The closer your comps match the finished product, the more reliable the ARV, and the more trustworthy every number this calculator produces.
Does the repair estimate include everything?
It should include the full scope to reach ARV condition: structural, mechanical, cosmetic, permits, and a contingency for surprises behind the walls. New investors routinely underestimate rehab, which is the most common way the 70% Rule gets defeated in practice — the formula was sound, but the repair number fed into it was too low. Get contractor bids rather than guessing, and add a contingency of 10 to 20 percent until your estimates have a track record.
What if my market never has deals at 70%?
Some competitive markets rarely produce properties that pencil at a strict 70%, which is why many active investors operate at 72 to 75% and make up the thinner per-deal margin with volume, speed, and lower financing costs. The point of the rule is not the specific number; it is forcing yourself to define a ceiling and refuse to cross it. Set the percentage to match your real costs and risk, then hold the line.
How is MAO different from what I should offer first?
The MAO is your ceiling, not your opening bid. Your first offer should sit below it to leave room for negotiation. Treating the maximum as your starting point removes your margin for error and your room to maneuver. Know your MAO precisely, open beneath it, and never let a bidding war push you past it.
Can I use this for a rental instead of a flip?
The MAO logic is built for flips, where the exit is a sale at ARV. For a buy-and-hold rental, the purchase price is better judged against cash flow and debt coverage — what the property earns versus what the financing costs each month. The DSCR calculator on this site is the right tool for that question; this one is for deals you intend to renovate and sell.
Published: June 2026 · The 70% Rule is an industry screening heuristic; pair with full deal underwriting before purchase