70% Rule / MAO Calculator for House Flips

The 70% rule is the first number most flippers run before they write an offer. It is also the number that gets people in trouble when they treat it as the bid instead of a screen. This MAO calculator (maximum allowable offer) shows the classic formula and the all-in version that subtracts profit, hold costs, wholesale fees, and selling costs — the lines that actually hit your settlement statement.

Use it before you request proof of funds or submit a fix-and-flip scenario. If the offer only works because ARV is optimistic, the ARV estimate guide is the next stop, not a higher leverage request.

What the 70% rule actually says

Classic MAO = (ARV × 0.70) − rehab. On a $280,000 after-repair value with a $45,000 rehab budget, the rule caps your purchase at $151,000. The 30% leftover is supposed to cover profit, interest, insurance, utilities, selling costs, and surprises. In a cheap-basis Midwest market with a four-month hold, that leftover can be enough. In a 2026 market where typical gross flip margins sat near 25.4% in ATTOM’s Q1 2026 U.S. Home Flipping Report — before rehab and carry — buying all the way to 70% often leaves no profit after the work is done.

The rule exists because new flippers overpay. It is a speed bump, not an underwriting model. Hard money lenders do not ask “did you hit 70%?” They ask whether loan-to-cost and the ARV cap still leave a sale or refinance exit. See how LTV and LTC work and fix-and-flip loan requirements.

Classic 70% MAO vs all-in MAO

The calculator outputs two ceilings on purpose. Classic MAO is the hallway conversation number. All-in MAO is the number that survives a settlement statement:

All-in MAO = ARV − rehab − desired profit − holding/closing costs − wholesale fee − selling costs.

If classic MAO is $151,000 and all-in MAO is $132,000, the 70% rule is lying to you by $19,000. That gap is usually selling costs plus interest-only carry. Model carry on the fix and flip profit calculator with a real hold month count — not the contractor’s optimistic six-week promise.

How to use this MAO calculator

1. ARV first, from sold comps. Three closed sales a lender’s appraiser would actually use. Inflated ARV is the most common way a 70% offer still loses money. Walk through the three-comp ARV method before you trust the output.
2. Rehab as a scope, not a vibe. Kitchen-and-bath numbers from a Facebook group will miss knob-and-tube, lead-safe work, and city permits. See average fix-and-flip rehab costs and how to submit a scope of work.
3. Set a profit you would still take after a 60-day delay. If $12,000 net only works on a 90-day hold, it is not a $12,000 deal.
4. Load hold and selling costs. Eight percent of ARV for agent, title, and transfer is a common starting point. Chicago and DC transfer friction runs higher — check the Chicago transfer tax guide or DC recordation and transfer tax guide before you copy an Indianapolis assumption into those metros.
5. Wholesalers: put the fee in. Your MAO is the end buyer’s MAO minus your spread. If the end buyer cannot close, that is a wholesale buyer rescue, not a higher ARV.
6. Compare your contract price to both outputs. Green on classic and red on all-in means you passed a slogan and failed the deal.

Worked example: Indianapolis ranch

Purchase target on a Warren Township ranch. Sold comps support $232,000 ARV after a documented $41,000 rehab. You want $25,000 net. Hold and closing (interest-only, insurance, utilities, origination) run about $9,500 on a 4.5-month Indianapolis hard money file. Selling costs at 8% of ARV are $18,560. No wholesale fee.

Here the all-in MAO is higher than classic 70%. That happens when the 30% leftover ($69,600 on this ARV) is larger than profit + hold + selling costs. The 70% rule is conservative on cheap-basis Midwest product with a real spread. You could theoretically pay more than $121,400 and still hit $25,000 — but only if ARV and rehab are honest. Run the same numbers through the fix and flip calculator at 90% LTC to see cash-in and interest carry. Metro context: Indiana fix-and-flip loans · Fountain Square funded BRRRR.

Worked example: Baltimore rowhouse where 70% fails you

East Baltimore rowhouse. Optimistic ARV $280,000. Rehab $62,000 once you add lead-safe interior work, a roof, and a vacant-building path. Profit target $22,000. Hold six months because permits and a ground-rent redemption eat the calendar — $14,000 carry. Selling costs 8% = $22,400. Assignment fee $0 if you are the flipper.

Classic and all-in sit close — until ARV is wrong. Baltimore’s Q1 2026 typical gross flip margin ranked among large metros in the ATTOM top-margin metro list at 65.9% gross (purchase-to-sale, before rehab). Gross is not net. If true ARV is $250,000 after honest comps, classic MAO collapses to $113,000 and all-in MAO to $107,600. Pay $134,000 because “the 70% rule said so” on a fantasy ARV and the file needs an extension, not a celebration. City underwriting lives on Baltimore hard money. Statewide: Maryland fix-and-flip.

Worked example: wholesaler MAO

You have a Chicago two-flat under contract. End-buyer flipper’s all-in MAO is $210,000. You need an $12,000 assignment. Your maximum price to the seller is $198,000. If you already signed at $205,000, the end buyer’s MAO does not magically expand. Options: cut your fee, find a buyer who will accept a thinner spread, or double-close with transactional funding only if the B-C price still covers the A-B price plus costs. Earnest money stuck on a bad number is a deposit problem, not a 70% problem.

When to break the 70% rule — and when not to

Break it when the leftover 30% is larger than your real cost stack and comps are conservative. That is the Indianapolis ranch case. Hold the line — or go tighter, to 65% — when:

• ARV depends on a renovation the neighborhood has not proven in sold comps
• Hold time is uncertain (permits, historic, lead, vacant-building, TOPA, judicial foreclosure)
• Selling costs are high (city transfer taxes, dual agency is not saving you 3 points)
• You are new and cannot absorb a $15,000 miss
• The exit is BRRRR and DSCR refinance, not a retail sale — then MAO is the wrong primary tool; use the BRRRR calculator and DSCR calculator

A BRRRR is not a 70% flip. You are buying a refinance, not a spread. Overpaying on a hold can still work if rent supports DSCR at a leverage you can actually get — DSCR for investment property goes to 85% purchase LTV in select markets for qualified borrowers. That is a different calculator and a different offer strategy.

MAO vs what a hard money lender will fund

Passing MAO does not mean the loan funds at 90% of your purchase. Jaken Finance Group prices fix-and-flip and bridge at 8.99%–13.5% interest-only, typically 6–12 months, with leverage capped by the lesser of loan-to-cost and an ARV ceiling (often up to 75% of ARV) on qualified files. Close speed on complete files is 7–10 business days. Credit is flexible — no minimum FICO on select programs — because we underwrite the property and exit plan, not a W-2.

If MAO says $150,000 and you bid $150,000 with $50,000 rehab, total project is $200,000. At 90% LTC the loan is $180,000. At a 75% ARV cap on a $280,000 ARV the cap is $210,000, so LTC binds. If your ARV is $220,000, the 75% cap is $165,000 and the file does not support $180,000 even though you “followed the 70% rule” on a different ARV. That mismatch is why MAO and the flip profit calculator should be run together, then the scenario submitted on the flip form.

70% rule, MAO, and the offer process

Write the offer to all-in MAO, not to classic 70%, unless classic is the lower number. Leave inspection or due-diligence room to recut when the scope grows. Auction and trustee sales do not give you that room — you need MAO done before you raise a paddle, plus proof of funds that a seller or sheriff will accept. Auction mechanics: hard money for auction property.

If you already overpaid and the loan is the problem, that is not an MAO exercise anymore. It is a maturity and balloon rescue if you are already in the deal, or a Second Look if financing fell through before closing.

Formulas, in one place

• Classic 70% MAO = ARV × (rule % ÷ 100) − rehab
• All-in MAO = ARV − rehab − desired profit − hold/close − wholesale fee − (ARV × selling-cost %)
• Offer vs MAO = all-in MAO − your contract price (positive means cushion)

Rule percentage is an input because some operators use 65% in competitive, high-cost metros and 75% only when they have repeat exits and cheap basis. Do not slide the percentage up to justify a bid you already emotionally made.

65%, 70%, and 75% — when to move the slider

The default 70% is a teaching number from cheap-basis decades, not a 2026 constant. Move down to 65% when selling costs are high, hold time is uncertain, or you have never finished a project in that city. Stay at 70% when comps are tight, rehab is documented, and you have sold similar product. 75% is for repeat sponsors in markets like Indianapolis or parts of Baltimore County where the all-in cost stack is still smaller than 30% of ARV — and even then, trust all-in MAO over the slogan. Sliding to 80% to win a bidding war is how balloons show up on the maturity refinance page eight months later.

National flip margins in ATTOM Q1 2026 recovered only to 25.4% typical gross. Gross ignores rehab. If rehab is 20% of ARV, you are not keeping 25%. The 70% rule’s 30% “cushion” is trying to be rehab-plus-profit-plus-friction in one blob. All-in MAO un-blobs it.

MAO for assignments vs double closes

On an assignment, your fee is a line the end buyer’s MAO must absorb. On a double close, you also pay transactional funding (often in the 1%–2% of the A-leg range plus costs) and you take title for hours. That extra cost comes out of spread — which means it comes out of MAO. If the double close is required because the contract banned assignment, run all-in MAO with the funding fee in the wholesale-fee box (or in hold/close). Do not discover it on the settlement statement.

Proof of funds to get the contract is a different tool: wholesaler POF. MAO decides whether the contract should exist. POF decides whether the seller believes you.

Common MAO mistakes

• ARV from list prices. Appraisers use closed sales. So do we.
• Rehab copied from a YouTube gut. Lead, knob-and-tube, and city permits are local. Baltimore rows are not Dallas SFR — see Baltimore hard money.
• Zero months of hold. Even a “quick” flip has interest, insurance, and utilities. The hard money rates page explains IO carry.
• Ignoring transfer tax. DC and Chicago will humble an 8% selling-cost assumption.
• Using flip MAO on a BRRRR. Refinance equity is a DSCR/LTC problem. Use the BRRRR calculator.
• Winning the bid at classic 70% after the scope grew $20,000. Re-run MAO when the inspection ends, then recut or walk.

From MAO to a loan file

Once the offer is at or under all-in MAO, package the comps, scope, and contract for fix-and-flip intake. Leverage still has to clear LTC and the ARV cap. A perfect MAO with a fantasy ARV becomes a decline or a hard money denial you then send to Second Look. Better to miss the house than to catch a balloon you cannot pay.

Related calculators and acquisition guides

• Fix and flip loan calculator — profit, LTC, and interest carry after you have an offer
• BRRRR calculator — when the exit is refinance, not resale
• DSCR calculator — rent versus payment on the hold
• Instant ARV estimate guide — comps before MAO
• All investor calculators
• What is a hard money loan?
• Fix-and-flip statistics 2026

Embed this tool: MAO calculator embed code.

Pre-qualify for fix-and-flip financing · (833) 264-7776

MAO and auctions

Sheriff sales, tax deeds after foreclosure, and online auctions do not let you recut after inspection. Your MAO has to be done with worse information: exterior-only photos, a tax card, and whatever a neighbor yelled from the porch. Haircut ARV. Inflate rehab. Use 65%. Bring proof of funds sized to the bid plus a cushion, not to the dream. Auction.com without interior inspection is the same discipline. Cook County and Baltimore City tax processes are not interchangeable — know which deed you are actually buying.

If you win and then cannot finance, you are in deposit-risk land. That is why MAO and EMD funding are separate tools. A high EMD on a bid above all-in MAO is how earnest money becomes a donation.

When you submit a scenario, an analyst is looking at spread: ARV versus all-in cost versus hold. MAO is how you show you already did that work. A file that bids $40,000 over all-in MAO and then asks for 100% LTC is two problems stacked. A file that sits $15,000 under all-in MAO with three comps and a contractor bid is a conversation. That is the difference between a normal loan process and a last-week rescue.

Pair MAO with a hold-month sensitivity: if all-in MAO is $140,000 at four months of carry and $128,000 at seven months, your bid has to assume the slower calendar in permit-heavy cities. Chicago, DC, and Baltimore are slower than a suburban Indiana ranch. That is not pessimism. It is how you avoid a balloon conversation.

New investors under six figures should still run MAO. A $90,000 ARV with $25,000 rehab is exactly where the 70% rule was born — and where national lenders’ minimum loan amounts often refuse to play. See DSCR under $100K for the hold version of small-balance, and submit the flip anyway if the spread is real.

Print the all-in MAO and tape it to the offer. If the listing agent pushes you $8,000 over it, that $8,000 is profit you already assigned to yourself. Either recut rehab, accept less profit, or walk. The calculator cannot want the house for you.

Calculator outputs are educational estimates only. The 70% rule is not a lending guideline. Rates, terms and conditions offered only to qualified borrowers and are subject to change without notice. Jaken Finance Group finances non-owner-occupied investment property.