Maximum Allowable Offer Calculator

Calculate Maximum Allowable Offer (MAO)









Formula

The formula to calculate the Maximum Allowable Offer (MAO) is:

\[ MAO = ARV - (RC + DP + HC + CC) \]

Where:

Definition

Example

Let's say the After Repair Value (ARV) is $300,000, the Repair Costs (RC) are $50,000, the Desired Profit (DP) is $40,000, the Holding Costs (HC) are $10,000, and the Closing Costs (CC) are $5,000. Using the formula:

\[ MAO = 300,000 - (50,000 + 40,000 + 10,000 + 5,000) = 300,000 - 105,000 = 195,000 \]

So, the Maximum Allowable Offer is $195,000.