MAO stands for maximum allowable offer. It is the highest number a buyer can pay and still hit their target return after repairs, carrying costs, closing costs, and your wholesale fee.
At its simplest, MAO is ARV minus repairs, minus closing and carrying costs, minus the investor margin, minus your assignment fee. The exact formula changes by market and buyer type, but the logic stays the same.
A buyer doing heavy construction in a slower market needs a larger margin than a buyer doing cosmetic work in a tight resale corridor. The wrong margin assumption makes your MAO look better than it really is.
If ARV is inflated or repairs are soft, MAO becomes fiction. That is why a serious MAO workflow always starts with clean comping and realistic scope.
FAQ
Short answers to the questions operators and motivated sellers ask most often.
No. Different buyers, markets, and strategies change the target margin and cost assumptions.
Not exactly. Wholesalers need to leave enough room for the end buyer and still preserve an assignment fee, so the basis has to be even cleaner.
Next step
The workspace combines subject facts, comps, risk, valuation, and packet generation in one flow.