ARV & House Flipping Calculator — MAO, 70% Rule & Profit Gauge
Calculate your Maximum Allowable Offer (MAO) for any fix-and-flip deal. Enter the After Repair Value, repair costs, holding costs, and target profit to see your MAO, estimated profit, ROI, and the 70% Rule benchmark — with an interactive profit gauge chart.
ARV & Flipping
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Enter Values
After Repair Value (ARV)
$300,000
Total Project Costs
$240,000
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The 70% Rule
Estimated Profit
$60,000
Strong deal — above 20% ROI target.
Budget Breakdown (% of ARV)
Purchase (MAO)
$175,000
Repairs
$50,000
Holding Costs
$15,000
Profit
$60,000
MAO
$175,000
Total Costs
$240,000
70% Rule
$160,000
ROI
25.0%
The Formula
The Maximum Allowable Offer (MAO) is the most you can pay for a property and still hit your target profit margin. The 70% Rule is a quick shorthand: ARV × 0.70 − repairs. If your MAO is above the 70% rule number, you are paying a premium. The MAO formula works backward from the expected sale price (ARV), deducts your desired profit percentage first (so you guarantee your margin), then subtracts all the costs you will incur to complete the project. What remains is the maximum you can pay for the property.
Variable Definitions
After Repair Value
The estimated market value of the property after all renovations are complete. This is always an estimate — use comparable sales (comps) from the same neighborhood within the last 3-6 months.
Maximum Allowable Offer
The highest price you can pay for the property to achieve your target profit margin. Always negotiate toward a number below your MAO — this is your walk-away price, not your opening offer.
70% Rule
A quick guideline: never pay more than 70% of ARV minus repair costs. Helps avoid overpaying. The remaining 30% covers your profit, holding costs, closing costs, and transaction fees.
How to Use This Calculator
- 1
Enter the After Repair Value (ARV) — the estimated sale price after renovations. Research comparable sold properties in the same neighborhood.
- 2
Enter your estimated repair and renovation costs. Get contractor bids before making an offer — do not rely on rough estimates.
- 3
Enter holding costs: loan interest, property taxes, insurance, utilities during the flip period. A typical flip takes 3-6 months.
- 4
Set your target profit margin as a percentage of the total project cost. Most investors target 15-25% minimum.
- 5
The calculator shows your MAO, estimated profit, and ROI. Compare against the 70% Rule as a sanity check on your numbers.
Common Applications
- Calculate the maximum offer price for a fixer-upper property while ensuring your target profit margin is achieved after all renovation costs.
- Apply the 70 percent rule as a quick sanity check to avoid overpaying on potential house flipping investments.
- Compare multiple deal opportunities by analyzing the projected ROI for each property before making an offer.
The MAO formula works backward from the expected sale price to determine the most you can pay for a fixer-upper while still hitting your profit target
Understanding the Concept
House flipping is about buying right. The MAO formula ensures you account for all costs plus your desired profit before making an offer. The 70% Rule is a quick industry heuristic — it assumes 30% of the ARV covers your profit, holding costs, and transaction fees. If your calculated MAO is below the 70% Rule number, you have a conservative deal. If it is above, you are either accepting thinner margins or the market demands it. Successful flippers typically analyze dozens of properties for every one they buy, using the MAO formula as a gatekeeper to ensure they never overpay. The most common mistake new flippers make is underestimating repair costs — always add a 10-20% contingency buffer to your initial repair estimate. The second most common mistake is overestimating the ARV by using the most optimistic comparable sale rather than a conservative average.
Frequently Asked Questions
Sources & References
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