Free Investor Tool

ARV CALCULATOR
70% RULE & MAO

Calculate your maximum allowable offer in seconds. Enter the ARV and rehab cost — we do the math. Built for flippers, BRRRR investors, and wholesalers in Maryland.

Calculation Method

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The price the property will sell for after a full rehab.

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Investor Rule

Maximum Allowable Offer

$0

Enter ARV and rehab cost to calculate your maximum allowable offer.

What is the 70% rule in real estate investing?

The 70% rule is the most widely used underwriting shortcut in real estate investing. It says a flipper or BRRRR investor should pay no more than 70% of a property's after-repair value (ARV), minus the estimated rehab cost. On a $250,000 ARV with $40,000 of rehab, the maximum offer is ($250,000 × 0.70) − $40,000 = $135,000. That $75,000 margin covers the investor's profit, holding costs during the renovation, closing costs on both sides, and a safety buffer for surprises.

It's a shortcut, not a science. It works best for mid-range flips between $150K and $400K ARV. Below that range, fixed costs eat the margin. Above that range, 70% is usually too conservative and you'll lose deals to investors running 75% or even 80%. For anything outside the sweet spot, switch this calculator to profit-based mode and enter your actual target profit.

How to calculate ARV on a Baltimore investment property

ARV is the single most important number on any deal. Get it wrong and every other calculation collapses. Three rules of thumb we use on every Baltimore wholesale deal:

  1. Tight radius. Stay within a half-mile. In Baltimore neighborhoods cross a busy street and the values drop 20%. Stay on the same block when you can.
  2. Fresh comps only. Sold in the last 3 months is ideal, 6 months is acceptable, 12 months is a stretch. Baltimore's market moves fast enough that year-old comps are often misleading.
  3. Similar GLA and beds. Comps within ±15% of subject square footage, same bedroom count, similar finish level (fully renovated, not "updated" or "as-is"). A 3-bed with 1,200 sqft is not comparable to a 4-bed with 1,800 sqft, even on the same street.

The ARV you plug into this calculator should be the price a fully-renovated, retail-ready version of the subject property would sell for — not the as-is price, not the Zestimate, not what you hope it's worth.

70% vs 75% vs 65% — which rule should you use?

The rule percentage is a risk dial. Higher percentage = higher offers = more deals but tighter margins. Lower percentage = fewer deals but more cushion.

  • Use 70% as your default. It's the industry baseline for a reason.
  • Use 75% when the market is hot, rehab is cosmetic, ARV is confident (multiple strong comps), and your exit plan is fast. Also for BRRRR deals where a 75% LTV refinance is the goal.
  • Use 65%when rehab scope is uncertain, the neighborhood is less liquid, you're newer to flipping, or ARV comps are thin.

In practice, most experienced Baltimore flippers run 68-72% depending on the ZIP code. Dundalk and Essex cash-flow markets tolerate 72%+ because rentals refinance cleanly; harder-to-exit markets demand 65-68% discipline.

Using the MAO on an Impact House Deals property

Every property on Impact House Deals includes the numbers you need to run this calculator: ARV, rehab estimate, and repair level. Here's the workflow:

  1. Open any active deal and grab the ARV and rehab estimate.
  2. Plug them into this calculator. Use 70% for a standard flip, 75% for BRRRR, or switch to profit-based with your target dollar profit.
  3. Compare the MAO to the asking price. If the asking is at or below your MAO, the deal pencils.
  4. Click "Submit Offer" on the deal page and we'll review within 24 hours.

Beyond the 70% rule — profit-based underwriting

The 70% rule is a shortcut. Serious investors eventually graduate to profit-based underwriting, which accounts for every cost explicitly:

  • Holding costs — hard money or private money interest, insurance, utilities, taxes, HOA during the rehab window. Typical: 2-4% of ARV for a 4-6 month hold.
  • Selling costs — agent commissions (typically 5-6%), transfer taxes in Maryland, closing costs at the exit. Typical: 7-9% of ARV.
  • Rehab contingency — build in 10-15% above your detailed scope for surprises. Old Baltimore row homes almost always surprise you.
  • Target profit— your minimum acceptable dollar profit. Don't think in percentages for this; think in dollars. $25K minimum on an average flip, $40K+ on a heavy rehab.

Switch this calculator to Profit-Based mode and it handles all four. Adjust holding %, selling %, and target profit to match your actual cost structure.

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Common Questions

ARV calculator FAQ

What is the 70% rule in real estate investing?+

The 70% rule is a quick underwriting shortcut that says an investor should pay no more than 70% of a property’s after-repair value (ARV) minus the estimated rehab cost. For example, on a $200,000 ARV with $40,000 in rehab, the maximum offer would be ($200,000 × 0.70) − $40,000 = $100,000. It bakes in profit, holding costs, and selling costs into one clean rule of thumb.

What is ARV (after repair value)?+

ARV stands for after repair value — the price a property will sell for once renovations are complete. It’s calculated using recently sold comparable properties ("comps") within a tight radius, usually homes that sold in the last 3-6 months, similar size and layout, and fully renovated to retail condition. ARV is the single most important number on any flip or BRRRR deal because it sets the ceiling for every other calculation.

How accurate is the 70% rule?+

The 70% rule works well for mid-range flips ($150K-$400K ARV) in average-velocity markets. It tends to be too conservative on higher-ARV properties (where fixed costs eat less of the margin) and too aggressive on very low-ARV properties (where even small cost overruns wipe out profit). For deals outside the sweet spot, use the profit-based method — enter your desired profit dollar amount, and the calculator backs into the max offer.

Should I use 70%, 75%, or 65%?+

Use 70% as your default. Use 75% when: the market is hot, you’re confident on ARV, rehab is cosmetic, and your exit is fast. Use 65% when: the market is soft, rehab is heavy or uncertain, the neighborhood is less liquid, or you’re newer to flipping and need a bigger safety margin. In Baltimore, most experienced flippers run 68-72% depending on the ZIP code.

What is MAO (maximum allowable offer)?+

MAO stands for maximum allowable offer — the most you can pay for a property and still hit your target profit. It’s the output of the 70% rule or any profit-based calculation. Serious wholesalers and flippers never offer above their MAO; walking away from deals is how you stay profitable long-term.

Does this calculator work for BRRRR deals?+

Yes. For BRRRR, use ARV as the refinance appraisal value (what the bank will lend on), rehab as your renovation budget, and the 75% rule (most DSCR lenders refinance at 75% LTV). The MAO tells you the max purchase price that lets you recoup all capital on the cash-out refinance.

What about holding costs and closing costs?+

The 70% rule bakes those into the 30% spread. If you want to model them explicitly, switch the calculator to Profit-Based mode and adjust the holding % (typically 2-4% of ARV for a 4-6 month hold) and selling % (typically 7-9% of ARV covering agent commissions, transfer taxes, and closing costs).

Can I use this on an Impact House Deals property?+

Absolutely — that’s what it’s built for. Every deal on Impact House Deals includes the ARV and rehab estimate you need as inputs. Run the numbers, compare to the asking price, and if your MAO matches or exceeds the asking price, submit an offer directly from the deal page.