How to Analyze a Wholesale Deal (ARV, MAO & More)

To analyze a wholesale real estate deal, estimate the property’s after-repair value (ARV), calculate repair costs, determine the maximum allowable offer (MAO), and account for closing, holding, and assignment costs. Comparing these numbers helps wholesalers determine whether a property has enough potential profit to make a safe offer.

Key Takeaways

• Analyzing a wholesale deal starts with determining the ARV (After Repair Value) using 3–5 recently sold comparable properties that closely match the subject property.
• Accurate repair estimates are essential because underestimating renovation costs can reduce your profit or cause a deal to fall apart. Contractor walkthroughs provide the most accurate estimates, while price-per-square-foot ranges can provide a quick starting point.
• The MAO (Maximum Allowable Offer) helps wholesalers determine the highest price they should pay while leaving room for repairs, the assignment fee, and potential profit.
• The basic MAO formula is: MAO = (ARV × 70%) − Repair Costs − Assignment Fee. The percentage can be adjusted depending on market conditions and buyer demand.
• Your actual offer should generally be below your MAO, giving you room to negotiate and account for unexpected costs.
• A successful wholesale deal depends on accurate numbers, from comparable sales and repair estimates to the assignment fee and final offer.
• REsimpli can streamline wholesale deal analysis with tools for comps, repair estimates, MAO calculations, offer tracking, and lead management in one platform.
• Double-check your ARV and repair estimates before making an offer. Using multiple comps and getting a second opinion on major repairs can help reduce costly mistakes.

What Is a Wholesale Deal in Real Estate?

Wholesaling is the process of getting a property under contract at a low price and assigning that contract to a cash buyer for a fee. You’re not renovating or holding the property. You’re the connector between a motivated seller and an end buyer.

But here’s the key: your profit depends entirely on your ability to analyze the numbers correctly. Miscalculate the ARV or underestimate the repair cost, and your deal falls apart.

Step 1: Determine the ARV (After Repair Value)

What is ARV?

ARV stands for After Repair Value. It’s the price the property would sell for on the open market after it’s fully renovated. Every offer you make is based on this number, so it needs to be accurate.

How to Calculate ARV

To determine ARV:

• Find 3 to 5 recently sold comparable properties (comps).
  
• They should be within 0.5 miles, sold in the last 6 months, and match the subject property in bed, bath, and square footage.
  
• Average their sold prices to get your ARV.
  

Example:

• Comp 1: $220,000
  
• Comp 2: $230,000
  
• Comp 3: $225,000
  
• ARV = ($220,000 + $230,000 + $225,000) / 3 = $225,000
  

Step 2: Estimate the Repair Costs

Two Common Methods

1. Contractor Walkthrough: Best for accuracy. Have a contractor give you a detailed bid.
   
2. Price per Square Foot: Use ballpark figures:
   
   • Light cosmetic: $15 to $25 per sqft
     
   • Moderate rehab: $30 to $45 per sqft
     
   • Full gut: $50 to $70 per sqft
     

Typical Rehab Categories

• Interior: Paint, flooring, kitchen updates, bathroom remodel
  
• Exterior: Roofing, siding, windows, landscaping
  
• Systems: HVAC, electrical, plumbing
  

Use REsimpli for Estimates

Inside REsimpli, you can add custom repair templates for each lead. This includes line items for each renovation type with pricing, so you can estimate repairs without needing to leave the platform.

Step 3: Calculate Your MAO (Maximum Allowable Offer)

The MAO Formula

This is the number one tool wholesalers use to reverse engineer a profitable deal.

Formula:
MAO = (ARV × 70%) – Repair Costs – Assignment Fee

You can adjust the 70 percent depending on how hot your market is or how aggressive your buyers are.

Example Calculation

• ARV: $225,000
  
• Repairs: $40,000
  
• Assignment Fee: $10,000
  
• MAO = ($225,000 × 0.70) – $40,000 – $10,000
  
• MAO = $112,500
  

You should aim to get the property under contract below this number to allow negotiation room.

Use REsimpli’s Built-in MAO Calculator

REsimpli automatically calculates MAO for every lead once you enter your ARV, estimated repairs, and desired fee. This saves time and avoids spreadsheet mistakes.

Step 4: Make Your Offer

Stay Below MAO

MAO is your ceiling. Your actual offer should come in below that to give yourself room to negotiate or handle surprises.

Many investors start with 85 to 90 percent of their MAO as the initial offer, then negotiate up if needed.

Submit and Track Offers in REsimpli

Every offer you make inside REsimpli is timestamped and logged under the lead profile. You can even track seller responses and move leads automatically based on their decision.

Full Example of a Wholesale Deal Analysis

Let’s say you’re analyzing a 3-bed, 2-bath house in Memphis, TN:

• ARV: $250,000
  
• Estimated Repairs: $35,000
  
• Desired Assignment Fee: $10,000
  
• MAO = ($250,000 × 0.70) – $35,000 – $10,000
  
• MAO = $130,000
  

To be safe, you offer $120,000. Seller accepts. You find a buyer at $130,000 and walk away with a $10,000 assignment fee.

Extra Tips for Smarter Analysis

• Always double check your ARV with multiple comps.
  
• Get second opinions on major repair estimates.
  
• In slower markets, adjust your MAO formula to use 65 or even 60 percent.
  
• If you’re working with virtual assistants, create a simple MAO calculator sheet or train them inside REsimpli.
  

How REsimpli Helps You Analyze Deals in Minutes

• MLS-style comps for accurate ARV
  
• Repair cost estimator with templates
  
• MAO calculator for every lead
  
• Auto-save and organize offers
  
• Everything synced between desktop and mobile
  

With REsimpli, you don’t need to jump between Zillow, Excel, and paper notes. Everything you need is in one place.

Conclusion

Analyzing wholesale deals comes down to this:

1. Get the ARV right using local comps.
   
2. Estimate repairs using walkthroughs or square footage.
   
3. Calculate your MAO using a consistent formula.
   
4. Offer below your MAO and close the deal.
   

If you’re doing this manually or guessing on numbers, you’re leaving profit on the table. With REsimpli, you can simplify the entire process and analyze deals with speed and accuracy.