What is the 70% rule?
The 70% rule caps your offer at 70% of after repair value, which holds back 30% to cover the end buyer profit, holding costs, closing costs, and commissions. It is a fast sanity check that keeps you from overpaying. See the glossary definition of MAO for the one-line version.
How do you calculate MAO?
MAO = (ARV times 0.70) minus repair costs minus your wholesale fee. Take a property with a $300,000 ARV and $40,000 in repairs. The 70% rule number is $170,000. Subtract a $10,000 fee and your maximum offer to the seller is $160,000.
Skip the mental math and use the free MAO calculator, which shows your offer, your fee, and the buyer equity at once.
Is the 70% rule always right?
No, 70% is a starting guideline, not a fixed law. Investors drop to 65% or lower on heavy rehabs or in slower markets for a bigger safety margin, and push toward 75 to 80% in hot, high-value markets where comps are strong. The calculator lets you change the multiplier to match.
How does this connect to cold calling?
The 70% rule only helps if you have enough deals to apply it to, which means a steady flow of motivated sellers. Most owners will not accept a 70% offer, so you need volume to find the ones who will. That is what cold calling for wholesalers is built to produce, with a written lead guarantee on every plan.