How to Find Maximum Allowable Offers Easy and Fast!
If you’re a new real estate investor, the task of coming up with an offer to present to the seller is probably a little bit intimidating. You may fear that you’re going to offer too much and not be able to sell the property. Or Maybe you’re afraid to get punched in the nose when you come out with a “low-ball” offer. Never fear!
Finding the maximum allowable offer is easier than you think. It’s a simple formula that you can memorize in 2 minutes. The downside is that you usually need a calculator to find MAO relatively quickly. UNTIL NOW. I’ve created this super cool maximum allowable offer CHEAT SHEET!! You can download it, keep it on your iPad, or in your pocket (if you’re still a dinosaur) and whip it out when you’re trying to find MAO quickly.
There’s a simple formula on how to calculate maximum allowable offers (also called MAO – and pronounced “mayo”). Typically, we take the After Repaired Value (a.k.a. ARV) and multiply it by 65% and then subtract the estimated repairs. Since finding the maximum allowable offer is an art and not a science, then your MAO may be slightly different then someone else’s MAO.
The reason your Maximum Allowable Offer may be different than your BUYER’s MAO, is for 2 reasons.
1.You may estimate repairs at $10,000 – and your fellow investor may estimate them at $15,000.00, causing your formula to be different.
2. You may determine that ARV is $200,000, and your fellow investor may determine that ARV is $195,000.00
Watch this video and find out how to calculate MAO
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If you’ve experienced this scenario before, then this Cheat Sheet IS MADE FOR YOU
FREE MAO CHEAT SHEET
Download the Free MAO Cheat Sheet that you can carry in your pocket or car, and never pay too much for a property again!