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MAO calculator

Fix-and-flip MAO calculator example

A worked MAO calculator example for a fix-and-flip deal using ARV, repair costs, closing costs, holding costs, selling costs, and target margin.

Direct answer

A fix-and-flip MAO is the highest purchase price that still leaves your required margin after ARV, repair budget, buying costs, holding costs, selling costs, financing, and contingency. The simple version is ARV times a margin factor minus repairs. The better version subtracts all project costs explicitly.

Worked MAO example

ARV: $350,000. Target resale margin factor: 70%. Repair budget: $72,000. Buying, holding, financing, and selling costs: $31,000.

MAO = ($350,000 x 0.70) - $72,000 - $31,000 = $142,000. If repair risk is high, the conservative offer should be lower or the seller credit should cover the risky items.

Inputs that change the offer

ARV and repair cost usually move the MAO the most, but holding time, hard-money interest, resale commissions, and contingency can decide whether a thin deal survives.

  • ARV from renovated comparable sales
  • Repair range with contingency
  • Closing, holding, financing, and selling costs
  • Required profit or margin

Why scenario math matters

A single MAO number can hide risk. Conservative, standard, and aggressive scenarios show whether the deal only works when every assumption goes right.

Limitations

  • The 70% rule is a screen, not a final offer strategy.
  • ARV can change before resale, especially in thin or fast-moving markets.
  • Repair estimates can expand when demolition reveals hidden conditions.

How Scopebase handles it

Scopebase ties line-item repair ranges to MAO scenarios so investors can see how low, mid, and high repair outcomes change the offer ceiling.

The report highlights which repair risks deserve a lower offer, a seller credit, or specialist review before waiving diligence.

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FAQ

What is the basic MAO formula?

A common screen is MAO = ARV x 70% - repair costs. A fuller calculation also subtracts closing, holding, financing, selling costs, and contingency.

Should I use low or high repair costs in MAO?

Use the scenario that matches the risk. High-risk or low-evidence scopes should use the higher repair case or a larger contingency.

Can a deal work above 70% of ARV?

Sometimes, but only when timeline, financing, resale costs, repair risk, and target profit still support the offer.

Fix-and-flip MAO calculator example | Scopebase