How to Analyze a Wholesale Deal (ARV, Repairs, MAO & Your Fee)

You found a motivated seller and a property with potential, but now you're staring at the numbers wondering if this deal actually works. Without a reliable system to analyze a wholesale deal, you risk overpaying, losing your buyer, or leaving money on the table — and that's why this guide exists.

Key takeaways

• ARV (After Repair Value) is the most critical number — get it wrong and everything else falls apart.
• Repair costs must be estimated conservatively; always add a 10-20% contingency.
• Max Allowable Offer (MAO) is the formula: ARV × 70% – Repairs – Your Fee.
• Your assignment fee comes out of the deal upfront — it's not an afterthought.
• Practice with real comps and a spreadsheet before making your first offer.

What is wholesale deal analysis?

Wholesale deal analysis is the process of calculating whether a property can be profitably assigned to an end buyer. It uses the After Repair Value (ARV), estimated repair costs, and the buyer's required profit margin to determine the maximum price you can offer the seller — while still leaving room for your own assignment fee.

Think of it as reverse-engineering a deal. You start with what the property will be worth after renovations (ARV), subtract the buyer's profit and repair costs, and then subtract your fee. What's left is the highest price you can pay the seller.

Why is analyzing a wholesale deal so important?

A bad analysis leads to a bad deal — or no deal at all. If you overestimate the ARV or underestimate repairs, you might lock up a property that no buyer will touch. On the flip side, if you're too conservative, you might lose the deal to another wholesaler.

Accurate analysis also builds trust with cash buyers. When you present a deal with solid numbers, buyers know you've done your homework. They're more likely to work with you again.

How do you calculate the After Repair Value (ARV)?

ARV is the estimated sale price of the property after all renovations are complete. It's the foundation of every wholesale deal. To calculate it, you must find comparable properties (comps) that sold within the last six months, are within a half-mile radius, and have similar square footage, bedrooms, and bathrooms.

Step 1: Find sold comps

Use the MLS, Zillow, or a paid tool like PropStream. Look for at least three to five comps that are as similar as possible to the subject property after repairs. Adjust the price up or down for differences — for example, if a comp has an extra bathroom, subtract $10,000–$15,000 from its sale price.

Step 2: Calculate the average

Add up the adjusted sale prices of your comps and divide by the number of comps. That gives you a rough ARV. But don't stop there — also look at the price per square foot. If your comps average $200/sq ft and the subject property is 1,500 sq ft, your ARV is around $300,000.

Tip: Always use sold comps, not active listings. Active listings are asking prices, not what buyers actually paid.

How do you estimate repair costs?

Repair costs are the second most important number. Underestimating them is the fastest way to kill a deal. Walk the property with a contractor or use a repair estimator tool. Break costs into categories: structural, mechanical, cosmetic, and landscaping.

Common repair categories

• Roof: $5,000–$15,000 depending on size and material
• HVAC: $3,000–$8,000 for a new system
• Kitchen remodel: $15,000–$40,000 for mid-range
• Bathroom remodel: $7,000–$20,000 per bathroom
• Flooring: $3–$8 per square foot installed
• Paint: $1–$3 per square foot
• Permits and contingency: 10–20% of total repair estimate

Warning: Always add a contingency of at least 10–15% for unexpected issues like mold, foundation cracks, or outdated wiring. Sellers often hide problems.

What is the Max Allowable Offer (MAO)?

Max Allowable Offer (MAO) is the highest price you can pay the seller and still leave enough profit for the buyer and yourself. The standard formula used by most wholesalers is:

MAO = ARV × 70% – Estimated Repairs – Your Assignment Fee

The 70% rule accounts for the buyer's desired profit (typically 10–15%) plus their holding costs, closing costs, and real estate commission. Some markets use 65% or 75%, so adjust based on your local buyer expectations.

Example MAO calculation

Let's say the ARV is $300,000, repairs are $40,000, and you want a $15,000 assignment fee.

• ARV × 70% = $210,000
• Subtract repairs: $210,000 – $40,000 = $170,000
• Subtract your fee: $170,000 – $15,000 = $155,000

Your MAO is $155,000. That's the most you can offer the seller.

How do you determine your assignment fee?

Your assignment fee is the profit you earn for finding and locking up the deal. It's typically $5,000 to $20,000 depending on the deal size and market. Some wholesalers aim for a flat fee, while others use a percentage of the spread between MAO and the actual contract price.

Fee strategies

• Flat fee: Pick a number, say $10,000, and subtract it from MAO.
• Percentage: Take 10–15% of the buyer's profit (the spread between ARV × 70% and the contract price).
• Negotiate: If the seller won't budge, you can reduce your fee to get the deal done — but never go below $5,000 for a single-family home.

Tip: Disclose your assignment fee in the contract. Most buyers and title companies require it.

How do you run the numbers on a wholesale deal? (Full example)

Let's walk through a complete deal analysis from start to finish. We'll use a fictional property to illustrate the process.

Property details

• Address: 123 Main St, Anytown, USA
• 3 bed, 2 bath, 1,500 sq ft
• Needs new roof, HVAC, kitchen, and bathrooms
• Estimated ARV: $300,000 (based on comps)
• Estimated repairs: $50,000 (including 15% contingency)
• Desired assignment fee: $15,000

Step 1: Calculate MAO

MAO = $300,000 × 70% – $50,000 – $15,000 = $145,000

Step 2: Determine your offer

You decide to offer $140,000 to leave room for negotiation. The seller counteroffers at $150,000. You explain your numbers and hold firm at $145,000. The seller accepts.

Step 3: Find a buyer

You market the deal to your cash buyer list. A buyer agrees to purchase the contract for $160,000 (the ARV × 70% minus repairs = $160,000, which includes your $15,000 fee).

Step 4: Close and collect

At closing, the buyer pays $160,000 to the seller. The seller receives $145,000 (your contract price). The title company pays you $15,000 as the assignment fee.

What are common mistakes in wholesale deal analysis?

Even experienced wholesalers make errors. Here are the most frequent pitfalls and how to avoid them.

Overestimating ARV

Using comps that are too old, too far away, or not adjusted for condition. Always use the most recent, closest comps and make honest adjustments.

Underestimating repairs

Skipping a contractor walk-through or ignoring permits. Get a real estimate from a licensed contractor before making an offer.

Ignoring holding costs

If you can't assign the deal quickly, you might have to pay utilities, taxes, or insurance. Factor in 1–2 months of holding costs if there's a risk of delay.

Not having a buyer lined up

Don't lock up a deal without knowing who will buy it. Pre-market to your list and have a backup buyer.

How do you use software to analyze wholesale deals?

Spreadsheets work, but dedicated software saves time and reduces errors. Most tools let you input ARV, repairs, and desired fee, then automatically calculate MAO and profit margins.

Comparison of analysis methods

Method	Pros	Cons
Spreadsheet	Free, fully customizable	Manual data entry, error-prone
Wholesaling software	Automated calculations, comp integration	Monthly subscription cost
Pen and paper	No tech needed	Slow, hard to adjust

Tip: Start with a spreadsheet template until you understand the math, then upgrade to software once you're doing multiple deals per month.

Recommended tools / next steps

Now that you know the math, practice on a few properties in your market. Use a free spreadsheet or try a wholesaling software like DealMachine or REIPro to speed up your analysis. Your next step is to find a motivated seller, run the numbers with the formula above, and make your first offer. The more deals you analyze, the faster and more accurate you'll become.

If you're looking for more tools to help you find comps, estimate repairs, or manage your deals, check out our directory of wholesaling software. Start with a free trial of one or two tools and see which fits your workflow.