Landlord Calculator

Max Allowable Offer Calculator

Before you flip a property, know the most you should pay for it. The 70% rule turns after-repair value and rehab cost into a maximum offer.

▶ Run the Calculator

Opens live in the Rental Flow app, no account needed.

What this calculator does

This answers a different question than a flip ROI calculator. Instead of telling you what you'll net on a deal you've already priced, it tells you the most you should offer going in, so the deal still has room for your profit margin and a cushion for cost overruns.

The formula

Max Allowable Offer = (After-Repair Value × Target %) − Rehab Cost

The target percentage defaults to 70%, the standard rule of thumb among flippers, though some investors adjust it up or down based on their market and risk tolerance.

Worked example

$230,000 ARV, $30,000 rehab, 70% target

After-repair value (ARV)$230,000
Target percentage70%
Rehab cost$30,000
Maximum allowable offer$131,000

Offering at or below $131,000 leaves room for profit and unexpected costs once the after-repair value and rehab budget are accounted for.

What is the 70% rule in real estate?

The maximum allowable offer (MAO) is the most you should pay for a flip and still hit your profit target. The common 70% rule says your offer should be no more than 70% of the after-repair value (ARV) minus the rehab cost, leaving room for holding costs, selling costs, and profit.

The 70% figure is a starting convention, not a rule of physics. In hot markets investors sometimes stretch to 75%, while thin-margin or high-risk projects call for a lower percentage. Adjust it to your real costs and required return before making an offer.

Frequently asked questions

Multiply the after-repair value by 70%, then subtract the estimated rehab cost. The result is the most you should offer. The 30% gap is meant to cover holding costs, selling costs, financing, and your profit margin on the flip.
ARV is the estimated market value of the property once renovations are complete, based on comparable sales of similar finished homes nearby. It anchors the entire flip analysis, since both the 70% rule and your profit depend on getting the ARV right.
Not necessarily. The 70% rule is a convention. Competitive markets may push investors to 75%, while riskier or thinner deals warrant a lower percentage for a bigger safety margin. Adjust the percentage to reflect your actual costs and required profit.
The gap between ARV and your offer is meant to absorb rehab, holding costs like taxes and insurance during the project, financing, selling costs such as agent commissions, and your profit. The MAO keeps you from overpaying and erasing that cushion.