Back out of a deal with

[Anh Nguyen]

Hello, my name is Anh from Chicago, IL.

This is my first post on Bigger Pockets and I'm seeking advice from the BP investor community.

A bit about my situation, I currently in the process of purchasing my first rental property, I put my offer in Mar 26 and suppose to close in Apr 14. In the beginning, I clearly explained to my agent this will be my rental investment and my agent contacted listing agent to clarify if the property has rental restriction, and they said it has no rental restriction.

After price negotiation and so on, we agree with their offer. I put in my offer letter plus $2000K earnest money. I paid $400 for home inspection, paid attorney $600. Today, we received all the legal document from the seller and 1 of the document said there is rental restriction, which is no more than 2 leased unit, and there are already 2 units rented out. It means I can't rent out this property if I bought it.

As plan, I suppose to put in another $8000 earnest money then close the deal this week. At this point, I don't want to pursue this property anymore because what can I possibly do with this property. It's clearly that listing agent made a mistake with the information he provided us, and I'm the one who paid for it. 

My question is what should I do at this point, possibly getting my earnest money back and $1000 I spent on home inspection and attorney? I had proof and all email that mentions this property has no rental restriction. I suppose to talk more with my attorney and agent this week.

Thank you :)