What is the 70% rule in wholesale real estate?

The 70% rule states that investors should pay no more than 70% of a property's After Repair Value (ARV) minus repair costs. Formula: Maximum Allowable Offer = (ARV × 70%) - Repair Costs - Wholesale Fee.

How do you calculate Maximum Allowable Offer (MAO)?

MAO = (ARV × ARV Multiplier) - Repair Costs - Wholesale Fee - Other Costs. The ARV multiplier is typically 70% but can vary from 65-75% depending on market conditions and buyer expectations.

What is a typical wholesale fee?

Wholesale assignment fees typically range from $5,000 to $15,000 per deal, though experienced wholesalers may command higher fees on larger deals. The fee should leave enough margin for the end buyer to profit.

Free Calculator

Wholesale / MAO Calculator

Calculate maximum allowable offer for wholesale real estate deals.

Property Details

After Repair Value (ARV)

Estimated Repair Costs

Your Wholesale Fee

ARV Multiplier %

Maximum Allowable Offer

$117,000

This is the max you should offer the seller

The MAO Formula

($250,000 × 70%)

− $40,000 repairs

− $10,000 wholesale fee

− $8,000 other costs

= $117,000 MAO

Your Profit

$10,000

Buyer's Profit

$75,000

Deal Breakdown

ARV$250,000

ARV × 70%$175,000

Less: Repair Costs-$40,000

Less: Your Fee-$10,000

Less: Other Costs-$8,000

MAO$117,000

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Investment Disclaimer

This calculator is for informational and educational purposes only. Results are estimates based on your inputs and do not constitute investment advice. Real estate investing involves risk, including potential loss of principal. Read full disclaimer

Understanding Wholesale Real Estate

Wholesaling is a real estate investment strategy where you contract a property and then assign that contract to an end buyer for a fee. The key is finding deeply discounted properties and connecting sellers with cash buyers.

MAO (Maximum Allowable Offer) is the highest price you can pay for a property while still making a profit. It's calculated based on the after-repair value (ARV), repair costs, and your desired profit margin.

The 70% Rule Explained

MAO = (ARV × 70%) - Repair Costs - Wholesale Fee

The 70% rule is a common guideline, but many investors adjust this percentage based on local market conditions and their risk tolerance. Hot markets might use 75-80%, while slower markets might require 65% or less.

Tips for Successful Wholesaling

Build a strong buyers list before you start finding deals
Get accurate repair estimates from contractors
Use conservative ARV estimates from recent comps
Build relationships with motivated seller lead sources
Always use an assignable contract or double close
Disclose your role as a wholesaler when required by law