Learn how to calculate the Max Allowable Offer (MAO), the highest price you can bid on a property while keeping your profit margin intact. The MAO comes from comparable sales of similar properties in the same neighborhood, matched by size, type, and year built. Using the wrong comps kills your accuracy and your deal.
One of the most important things to learn about wholesaling real estate is how to determine the highest price you can offer someone for their property, so you have the best chance of getting the deal while also leaving enough room on the table for you to assign the property and still make money yourself. We call this price the MAO, or max allowable offer. Your MAO is going to take into account several important factors. What are other similar properties selling for? You will need to look around at what other similar properties are selling for in the neighborhood. And when I say similar properties, I mean properties that are roughly the same size size, type, and year built. You do not want to compare a 1,200-square-foot house to a 2,000-square-foot house, or a single-family residential house to a condo, or a house built in 2020 to a house built in 1920.
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