How We Calculate Our Cash Offers — Maryland Property Buyers' Process

Maryland Property Buyers calculates every cash offer using a straightforward formula: Offer = After Repair Value (ARV) minus Repair Costs minus Our Margin minus Closing Costs. On a typical $250K ARV property needing $40K in repairs, that formula produces an offer around $157,500 to $170,000. Here is exactly how each number works and why we publish this openly.

Why We Share Our Formula

"Why would a cash buyer tell sellers exactly how they calculate offers?" It is the most common question we get, and the answer is simple: transparency earns trust, and trust earns deals.

The cash home-buying industry has a reputation problem. Too many companies throw out lowball numbers with no explanation, hoping sellers are desperate enough to accept. We take the opposite approach. When you understand how the math works, you can evaluate our offer on its merits. You can check our ARV against Zillow, Redfin, and recent comps yourself. You can get your own contractor bids. If our numbers are fair, that transparency works in our favor. If they are not, you should absolutely walk away.

We have found that sellers who understand the formula are more likely to close — not less — because there are no surprises and no feeling of being taken advantage of. That is good for everyone. Learn more about our team and values.

Step 1: After Repair Value (ARV)

The ARV is what your property would sell for on the open market after all necessary renovations are complete. This is the foundation of every calculation, and getting it right matters more than any other step.

Here is how we determine ARV:

• Comparable sales (comps): We pull 3-6 recently sold properties within 0.5 miles of your home that are similar in size, age, bedroom/bathroom count, and lot size. We use MLS data, not just Zillow estimates, because MLS captures concessions and actual close prices.
• Adjustments: If a comp has a finished basement and yours does not, we adjust down. If your lot is larger, we adjust up. Each feature gets a dollar-value adjustment based on what the Maryland market pays for it.
• Market conditions: In a rising market (like parts of Howard County and Anne Arundel County in 2026-2026), we factor in 1-3% appreciation over our expected hold time. In flat or cooling markets, we use current values with no appreciation bump.

For Maryland specifically, ARV varies dramatically by submarket. A 3-bed/2-bath renovated home might be worth $180,000 in Baltimore's Morrell Park, $350,000 in Glen Burnie, or $550,000 in Ellicott City. Accurate comps are everything.

Step 2: Repair Cost Estimate

We do not guess at repair costs. Every property we evaluate gets a walkthrough, and we use actual contractor bids from our network of licensed Maryland contractors. Here is what goes into the repair estimate:

• Structural: Foundation repair ($5K-$25K), roof replacement ($8K-$15K), framing ($3K-$10K)
• Mechanical systems: HVAC replacement ($5K-$10K), electrical panel upgrade ($2K-$4K), plumbing ($3K-$15K)
• Cosmetic: Kitchen renovation ($15K-$35K), bathroom remodel ($8K-$15K each), flooring ($3K-$8K), paint ($2K-$5K)
• Code compliance: Lead paint abatement ($5K-$15K), permit fees ($500-$2K), fire code upgrades ($1K-$5K)
• Contingency: We add a 10% buffer because renovations in older Maryland homes almost always uncover surprises — especially in pre-1950 Baltimore rowhouses where knob-and-tube wiring and lead pipes are common.

We share our repair estimate with you. If you believe it is too high, you are welcome to get your own bids. We would rather have an honest conversation about the numbers than lose a deal over a misunderstanding.

Step 3: Our Margin

Here is the part most cash buyers will never tell you: we target a margin of 10-15% of ARV on each deal. That is our gross profit before taxes and overhead.

On a $250K ARV property, that means $25,000 to $37,500. That margin covers:

• Business overhead: Office, staff, marketing, insurance, legal — the cost of running a legitimate company in Maryland.
• Risk: Not every project goes perfectly. We absorb cost overruns, market dips, and extended hold times. Roughly 1 in 10 deals generates little to no profit. Our margin on the other 9 has to carry the business.
• Profit: Yes, we make money. We are investors, not a charity. But 10-15% is a reasonable return for the risk, speed, and convenience we provide. By comparison, real estate agents collect 5-6% of the sale price for facilitating a transaction with zero financial risk.

Step 4: Closing and Holding Costs

These are the costs we incur from the day we buy your property to the day we sell the finished product:

• Purchase closing costs: Title insurance, settlement fees, recording fees — typically 1-2% of purchase price ($2K-$4K).
• Holding costs: Property taxes, insurance, utilities, and financing costs during the 3-6 month renovation and resale period. In Maryland, this runs $1,500-$3,000/month depending on the property value and county tax rate.
• Resale closing costs: Transfer taxes (Maryland charges 0.5% state + county varies), agent commissions when we sell (5-6%), title fees. On a $250K resale, this totals roughly $15K-$18K.

Combined, closing and holding costs typically run 8-12% of ARV, or $20,000-$30,000 on a $250K property.

Worked Example: $250K ARV Property

Let us put the formula together with a real scenario — a 3-bedroom rowhouse in Baltimore County that needs a full renovation.

Component	Amount	Calculation
After Repair Value (ARV)	$250,000	Based on 5 comparable sales within 0.5 mi
Repair Costs	-$40,000	New roof, HVAC, kitchen, bath, cosmetic (contractor bids)
Our Margin (12%)	-$30,000	12% of $250K ARV
Closing & Holding Costs (10%)	-$25,000	Purchase close + 4 months hold + resale close
Contingency (included in repairs)	—	10% buffer already in repair estimate
Our Cash Offer	$155,000	$250K - $40K - $30K - $25K

Is $155,000 less than the $250,000 ARV? Absolutely. But consider what this seller gets: $155,000 in cash within 7-14 days, zero repair costs, zero agent commissions, zero months of carrying costs, and zero risk of the deal falling through. If they listed this property as-is with an agent, they might get $160K-$180K — minus 6% commission ($9,600-$10,800), minus carrying costs, minus buyer inspection credits. The net difference shrinks dramatically.

When Our Offer Won't Work for You

Honesty goes both ways. Our formula does not produce a competitive offer in every situation:

• Move-in-ready homes in hot markets. If your property needs less than $10K in work and is in a high-demand area, an agent will almost certainly net you more. We will tell you that.
• Unrealistic ARV expectations. If you believe your home is worth $400K but comps support $300K, our offer will feel low. We base everything on data, not hope.
• Minimal equity. If you owe $200K on a property with an ARV of $220K, there simply is not enough room in the math for us to make an offer that pays off your mortgage and covers our costs.

Get Your No-Obligation Offer

Now you know the exact formula. If you want to see what the numbers look like for your Maryland property, request your free cash offer. We will walk you through every line item — the ARV, the repair estimate, our margin — so you can make an informed decision. No pressure, no games. You can also reach out with questions or call us directly at (443) 870-4065. We would rather have a real conversation than a hard sell.