09/20/2026
๐ WHAT IS A MAXIMUM ALLOWABLE OFFER?
If you are wholesaling or flipping houses, one of the most important questions is:
**What is the MOST I can pay for this property and still have the deal make sense?**
That number is called your **Maximum Allowable Offer โ MAO**.
A simple starting formula many investors use is:
**ARV ร 70% โ Repairs = MAO**
Hereโs an example:
๐ After Repair Value (ARV): **$300,000**
๐จ Estimated Repairs: **$50,000**
๐งฎ $300,000 ร 70% = **$210,000**
Then subtract the repairs:
**$210,000 โ $50,000 = $160,000**
Your estimated Maximum Allowable Offer would be:
๐ **$160,000**
But rememberโthe 70% Rule is only a screening tool.
Before making an actual offer, you still need to consider:
โ
Comparable sales
โ
Closing costs
โ
Financing costs
โ
Holding costs
โ
Selling costs
โ
Your desired profit
โ
Your exit strategy
The goal is not to offer the lowest number possible.
The goal is to understand what the deal can support without destroying your profit.
Want to practice running the numbers?
๐ Try the Deal Analyzer:
https://learningrealestateinvesting.com/lrei-deal-analyzer/
Know your numbers before you negotiate.