Calculate your Maximum Allowable Offer (MAO) for wholesale deals. Input the ARV, estimated rehab costs, and your desired assignment fee to find the price you need to get the property under contract.
Estimate rehab costs for your end buyer. This affects max offer.
| Strategy | Upfront Cash | Profit / Equity | ROI |
|---|---|---|---|
| Fix & Flip | $140,750 | $60,063 Net Profit | 42.7% |
| Buy & Hold | $140,750 | $736 Annual Cash Flow | 0.5% |
| WholesaleActive | $100 | $10,000 Assignment Fee | ∞ |
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Wholesaling real estate involves contracting a property and assigning that contract to an end buyer for a fee. You never actually purchase the property—you're selling the rights to buy it.
Your assignment fee is the difference between your contract price and what the end buyer pays. The end buyer (usually a flipper) will use the 70% rule, so you need to work backwards to determine your Maximum Allowable Offer.
Your MAO = (ARV × 0.70) - Repairs - Assignment Fee - Buyer's ProfitFlippers typically want $25,000-$50,000 profit on a deal. Add your desired assignment fee ($5,000-$20,000) on top of that. The remaining room determines what you can offer the seller.
Assignment: You assign your purchase contract to the buyer (simplest, most common). Double Close: You actually purchase the property and immediately resell it (hides your profit, useful for large spreads). Most wholesalers start with assignments.
Wholesaling is finding distressed properties under contract and assigning that contract to an end buyer (usually a flipper or landlord) for a fee. You never actually close on the property or take ownership.
Typical wholesale assignment fees range from $5,000 to $15,000 per deal. Larger deals in expensive markets can command $20,000+ fees. Your profit depends on finding good deals and having a strong buyers list.
Wholesaling requires minimal capital - usually just earnest money deposits ($500-$2,000) and marketing costs. This makes it a popular entry point into real estate investing.
When calculating your Maximum Allowable Offer (MAO), subtract your assignment fee from the standard 70% rule: MAO = (ARV × 0.70) - Rehab Costs - Your Fee. This ensures the end buyer has enough margin.
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