MAO Guide: Maximum Allowable Offer Formula

Calculate maximum allowable offer using ARV, repairs, fees, and profit.

What this guide helps you do

This guide explains the investment logic behind the related DealCalc tools. Use it to understand the formula, the assumptions, and the diligence questions before making a decision.

Key concepts

• Start with conservative assumptions.
• Separate value, income, expenses, financing, repairs, risk, and exit strategy.
• Verify every input with comps, documentation, inspection, or professional review.
• Use calculators for screening, not as a substitute for diligence.

Example workflow

Review the deal packet, extract the core numbers, run the relevant calculator, compare the output to your investment threshold, then identify the next diligence items that could change the decision.