Every wholesale deal in North Carolina lives or dies on two numbers: the After Repair Value (ARV) and the Maximum Allowable Offer (MAO). Get them right and the deal works for you, your end buyer, and the seller. Get them wrong and you either overpay for a house or scare off every rehabber who looks at your contract.
This guide walks through the exact formula — the same math the Cinch acquisition team applies on every offer — and when to bend it. If you want to run numbers on a live property right now, our free cash offer calculator applies this math to any NC address in about a minute, no signup required.
What Is ARV — and Why It Drives Everything
ARV stands for After Repair Value — the price a property would command on the open market after all renovations are complete. It is the single most important input in any wholesale deal because every other number in the equation depends on it. Overestimate ARV and you overpay for the house. Underestimate it and you leave money on the table or scare off your end buyer with a number that doesn't make sense.
To calculate ARV, pull recent comparable sales — homes with similar square footage, bedroom and bathroom counts, and lot characteristics:
- Distance: within half a mile of the subject property where possible.
- Recency: sold within the last 90 days. In fast-moving markets like North Hills in Raleigh or South End Charlotte, comps more than 6 months old can mislead you by thousands.
- Condition: compare against renovated sales, not other distressed properties — ARV is the after-repair number.
- Math: average the comps' price per square foot, then multiply by your property's square footage.
A house on Person Street in Durham trades very differently than the same square footage in Knightdale. If you're unfamiliar with pulling comps, Zillow's "Recently Sold" filter is a rough starting point; a local agent or appraiser gives you a number you can actually defend to a lender or an end buyer.
The MAO Formula, Line by Line
MAO stands for Maximum Allowable Offer. It defines the upper boundary of what you can pay for a property and still make the deal work — for you, and for the rehabber you're assigning the contract to.
Why 70% — and not 80% or 60%? The 30% gap between ARV and your offer covers four real cost categories that every rehabber in North Carolina faces on every deal:
- Rehabber's profit margin — typically 10–15% of ARV. Without this, no end buyer touches the deal.
- Carrying costs — property taxes, insurance, utilities, and loan interest during the rehab period. A 4-month rehab on a $300K ARV house can run $8,000–$12,000 in carrying costs alone.
- Closing costs — the rehabber pays closing costs twice: once when buying from you, once when selling to the retail buyer. Budget 2–3% on each end.
- Contingency buffer — every rehab hits something unexpected. Knob-and-tube wiring. A hidden crawl space issue. Permit delays. The 70% cushion absorbs it.
When to Adjust the Percentage
The 70% rule is a starting point, not a law. Experienced North Carolina investors adjust the multiplier based on the deal profile:
| Multiplier | Deal Profile | Why |
|---|---|---|
| 65% | Heavy rehab | Structural issues, foundation work, full gut renovation. The risk of overruns is highest here. |
| 70% | Standard | The industry baseline. Kitchen, baths, flooring, roof, HVAC — typical full renovation scope. |
| 75% | Light cosmetic | Paint, carpet, landscaping only. Strong market with fast-moving comps. Lower risk profile. |
In hot submarkets inside the Raleigh Beltline or in South End Charlotte, where days-on-market for renovated homes runs under 14 days, some investors stretch to 75–77% because the selling risk is lower. In slower markets, or on properties with deferred maintenance that's hard to scope, 65% is the safer floor. Default to 70% — it's the number that holds up across the widest range of NC markets and deal types.
Estimating Repairs Without Guessing
Be honest on the repair line. Investors lose money when they lowball repairs, not when they pay too much for a house. Walk the property before you commit to a number. Roof, HVAC, foundation, electrical, and plumbing are the five categories that kill margins if you guess. If you haven't walked it yet, add a 15–20% contingency buffer to your contractor estimate before plugging it into the formula.
MAO vs. Your Actual Offer
Your MAO is not your opening offer — it's your walk-away number. If you're wholesaling, you also need to back out your assignment fee before you can close. A $170,000 MAO with a $10,000 assignment fee means your real ceiling for what you can put under contract is $160,000. Build that math before you talk to the seller, not after you've shaken hands. If you're double closing instead of assigning, budget the same way: the transactional funding fee on the A-to-B leg comes out of your spread, and lenders like REI Double Close fund 100% of that first purchase — we cover the mechanics in how double closings get funded in NC.
And if the seller's asking price is above your MAO, that's not a dead deal — it's a negotiation. The formula gives you the math to have that conversation with data instead of gut feeling.
Cinch Home Buyers operates differently from a traditional wholesaler: we buy directly with our own cash, which means there's no assignment fee layer, no double-close cost, and no end buyer we need to find before we can commit. If you're an investor looking to partner on deals across North Carolina, learn how we work with investors here. Curious how the two models compare from the seller's side? Read Wholesaler vs. Cash Buyer.
