What is Maximum Allowable Offer (MAO) on a house flip?

Maximum Allowable Offer is the highest price you can pay for a fixer-upper and still hit your target profit after rehab, closing, holding, and financing costs. Our house flip calculator computes MAO instantly using either the 70% rule or your own custom cost inputs.

How does the 70% rule work for house flippers?

The 70% rule says you should pay no more than 70% of the After Repair Value (ARV) minus rehab costs. So if ARV is $300,000 and rehab is $50,000, MAO = ($300,000 × 0.70) − $50,000 = $160,000. It is a fast screening rule, but a full house flip calculator that also accounts for holding cost, financing cost, closing cost, and target profit gives a more accurate MAO.

What is ARV in real estate?

ARV stands for After Repair Value. It is the estimated resale price of the property after you complete all planned renovations. ARV is usually determined from comparable sold properties (comps) in the same neighborhood. Every good house flip calculator starts with ARV because it drives every downstream number.

House Flip Calculator | MAO, ARV, ROI & 70% Rule Tool

Q: How do I estimate rehab costs before I buy?

Walk the property with a contractor before your MAO offer is accepted. Split the rehab budget into six categories: exterior, interior (paint/floor/trim), kitchen, bath, mechanicals (HVAC/roof/plumbing/electrical), and misc/site. Our detailed rehab mode lets you enter line-items in each category and roll them into MAO automatically.

Q: Is this house flip calculator free?

Yes. HouseFlipCalc.com is 100% free. You can run unlimited flip analyses, save them to your account, generate shareable links, and export summaries — no subscription, no credit card.

How to Use This House Flip Calculator

The calculator above walks you through every input that matters on a fix-and-flip deal. Start with your After Repair Value (ARV) — the price you realistically expect to resell for. Then enter your rehab budget (either as a lump sum or broken out by category), your holding period, financing terms, and closing costs on both ends. The tool instantly computes your Maximum Allowable Offer (MAO), projected profit, and ROI so you know the highest price you can pay and still hit your target return.

Pro tip: Save your analyses to your free account so you can compare multiple properties side-by-side, share a report with your lender or partner, and revisit deals later when prices shift.

What Is Maximum Allowable Offer (MAO)?

Maximum Allowable Offer is the highest price a flipper can pay for a property and still hit their profit target after every cost is accounted for. It works backwards from your target profit: start with ARV, subtract rehab, holding, financing, closing costs on both purchase and resale, and your desired profit — whatever is left is your MAO. Paying more than MAO means shrinking (or wiping out) your profit margin.

The 70% Rule Explained

The 70% rule is a quick screening formula: MAO ≈ (ARV × 0.70) − Rehab Costs. The 30% cushion covers holding, financing, closing, and profit in a single stroke. It is fast, but it is a rule of thumb. If holding costs are unusually high (long rehab, hard money at 12%+), or resale commissions are lower than 6%, the 70% rule will either be too conservative or too aggressive. This calculator uses your actual inputs instead of a flat 30% cushion, which is why the MAO it produces is more accurate than a napkin 70% rule calculation.

Worked example

ARV: $300,000
Rehab: $50,000
70% rule MAO: ($300,000 × 0.70) − $50,000 = $160,000
Detailed MAO (with $8k holding, $6k financing, $18k resale commission, $25k profit target): approximately $143,000

The detailed calculation is $17,000 more conservative — the difference between a profitable flip and a wash.

Costs You Should Always Include in a Flip Analysis

Purchase closing costs — title, transfer tax, attorney, inspection (typically 1–3% of purchase price)
Rehab — split into exterior, interior, kitchen, bath, mechanicals, and misc/site so nothing gets missed
Holding costs — property tax, insurance, utilities, HOA, and lawn while you hold the property
Financing costs — hard money points and interest, or the opportunity cost of cash
Resale closing costs — listing commission, buyer commission, title fees, seller concessions
Contingency — most flippers add 10–15% to rehab as a buffer
Target profit — the number you actually want to walk away with after everything is done

Frequently Asked Questions About House Flipping

What is a good ROI for a house flip?

Experienced flippers typically target a 15–25% ROI on total cash invested per deal. On smaller flips a 10% ROI can still be worth it if the timeline is short. Anything under 10% ROI usually does not justify the risk, contractor headaches, and holding-cost exposure.

How do I estimate rehab costs before I buy?

Walk the property with a contractor before submitting your MAO offer. Break the budget into six categories — exterior, interior (paint/floor/trim), kitchen, bath, mechanicals (HVAC/roof/plumbing/electrical), and misc/site — then add 10–15% contingency. This calculator's detailed rehab mode lets you enter line-items per category and rolls them into MAO automatically.

What is ARV (After Repair Value)?

ARV is the estimated resale price of the property after you complete all planned renovations. Pull comparable sold properties in the same neighborhood (same bed/bath count, similar square footage, renovated to a similar level) sold in the last 3–6 months. Your ARV is only as good as your comps.

Is this house flip calculator free?

Yes. HouseFlipCalc.com is 100% free. Run unlimited analyses, save them to your account, generate shareable links, and export summaries. No subscription, no credit card.

Can beginners use this calculator?

Yes. Start in Quick mode with the 70% rule and a lump-sum rehab estimate to screen properties fast. Once you have a serious candidate, switch to Detailed mode and break out every cost category to get a more accurate MAO before you make an offer.

Should I use the 70% rule or the detailed calculator?

Use the 70% rule for initial screening — you can scan a whole MLS list in minutes. Use the detailed calculator on any property you are seriously considering. Deals that pencil under the 70% rule sometimes fall apart in detailed underwriting, and deals the 70% rule would kill sometimes pencil beautifully when hard money terms and holding costs are actually favorable.

Related Real Estate Tools & Resources

House flipping is one strategy. Depending on the property and your goals, you may also want to model it as a rental, look at what comparable homes have sold for, or find an agent who specializes in investment properties.