Real Estate Lingo: What is MAO?

Ever wondered what the highest offer you can make on a property should be to still turn a profit? In the world of real estate investing, that magic number is called the Maximum Allowable Offer (MAO).

This newsletter dives into the concept of MAO and why it's crucial for success. We'll also explore the connection between MAO and another key term: After Repair Value (ARV). Stay tuned for our next newsletter where we'll tackle ARV in detail!

Why is MAO Important?

Simple - it's all about profit! Real estate is about making smart investments, and MAO helps ensure you don't overpay for a property. By calculating your MAO, you can be confident your offer allows for renovations, holding costs, and still leaves room for a healthy return.

Remember: We're not in the business of being slumlords. We want to put out high-quality properties that benefit the housing market and build a strong reputation. MAO helps us achieve that by guiding us towards properties where we can make a win-win transaction.

So, how do you calculate your MAO?

There are different formulas and strategies, but we'll delve deeper into that in future newsletters. For now, the key takeaway is to understand that MAO is your guardrail, preventing you from overspending and ensuring a profitable investment.

Stay tuned! In our next newsletter, we'll explore ARV (After Repair Value) and how it plays a vital role in determining your MAO. We'll show you how these two concepts work together to create a solid real estate investment strategy.