Everything you need for an MAO with only using ZILLOW

The MAO refers to the highest price an investor can pay for a property and still benefit financially. It’s often calculated based on a specific formula or strategy. Below you will find some helpful tips.

Note: Search the property address on the zillow search bar, don’t click the google link.

Top things to look at immediately

●  # Of Beds and Baths

●  Square Footage

●  Type Of Property

●  Year Built

●  Lot Size 

 

Now Look For Active Comps In The Neighborhood!

(Make sure you have pending & accepting backup offers)

 

Pro Tip:

Active tells you where the market is going.
Sold comps gives you an idea of what it will appraise.

 

MAO Tips:

●  Look for comparable properties within 300-500sqft of the subject property.

●  Try not to cross major highways. Try to look in the same subdivision.

●  If you see a comp in a different subdivision. Make sure you recheck the

year built and type of property.

●  For an accurate MAO, you need to find near MODEL MATCHES.

 

Additional Tips:

●  Pool or no pool? This is a $15-30k+ price difference.

●  Is it near a major highway (decreases value)

●  If it’s a mobile, is it built before 1976? No financing if built before.

●  If it’s a mobile, do they own the land? If no, move on.

●  Flat roof VS sloped roof. Rare but flat roofs decrease value.

●  Make sure you are looking for similar curb appeals.

●  Does it have a garage? This adds value.

 

Now that you’ve identified your RETAIL VALUE. Let’s talk MAO. (Maximum Allowable Offer) Numbers you need to factor in for an educated offer.

 

ARV (Estimated Retail Value Fully Fixed Up)
Minus 7% Selling Costs (Closing Costs & Realtor Sell Side Fees) Minus Estimated Repair Costs
Minus 15% Investor Profit (This is off retail value)
Minus Our Investor Profit!

= MAO

 

Example: $300,000 ARV (1500sqft home, decent shape) Minus 7% Selling Costs = $21,000
Minus Repairs – $20 per sqft x 2000sqft = $30,000 Minus 15% Investor Profit = $45,000
Minus Wholesale Fee = $20,000 Total Reductions = $116,000 MAO = $184,000

 

Tips:

●  If it doesn’t need $30k of work. Profit increases. Same goes the other way.

●  If it’s a hot flip market, some investors are cool with 10% profit margin.

●  Typically, lipstick rehabs, price per square is $10-20 per sqft.

●  Medium renovations, $20-40 per sqft.

●  Full rehabs, $40-50 per sqft.

●  Fire damage? Ask! Could be a complete tear down or new build.

●  This does not include money costs, this is assuming we are dealing with a cash buyer. But that’s up to dispo for negotiation

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Note, if you’re on the phone with a seller and need a quick offer. Do the following.
ARV X 0.70 – Repairs – Wholesale Profit = MAO