How to Calculate MAO, ARV, and Rehab Costs Before Making an Offer
Master the fundamental calculations of real estate investing: Maximum Allowable Offer (MAO), After Repair Value (ARV), and repair estimation.
InvestorVI Team
May 4, 2026
The Triangle of Deal Analysis
Every successful investment relies on three core metrics: the ARV (what it will be worth), the Rehab Cost (what it will cost to fix), and the MAO (what you can afford to pay). If any of these are wrong, the deal fails.
Nailing the ARV
Find 3-5 recently sold properties that match your target property's characteristics. Adjust the value based on square footage, bedroom count, and finish quality to establish a firm ARV.
Systematizing Rehab Estimates
Use a price-per-square-foot model based on the level of rehab required (e.g., $15/sqft for cosmetic, $40/sqft for heavy). This gives you a fast, reliable baseline before getting contractor quotes.
Analyze Your First Deal
Stop guessing on margins. Use our free analyzer to compute accurate ROIs and MAOs.
Start Free AnalysisCalculating Your MAO
Stick strictly to your MAO formula (like the 70% rule). If the seller won't meet your MAO, walk away. Discipline is what separates professionals from amateurs.
Mentioned Tools & Resources
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Frequently Asked Questions
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