Question:
“What is an estoppel letter?”
Answer:
The following story actually happened to me two separate times…
I made an offer on an apartment building and it was accepted. That was the good news.
When I went through the apartments, I asked the tenants how much rent they paid. Oddly, EVERY tenant paid less than what the seller’s agent had stated.
Because I was basically buying an “income stream” and that stream was shallower than promised, I pulled out when the seller refused to lower the price.
That’s why…
When you buy a rental property, it’s prudent to verify that the seller’s statements about rents and deposits are accurate.
And an estoppel letter (yes, it’s an odd name) is the name of the form that tenants sign stating what rent they pay, if they’re due any future free rent (not uncommon in tough rental markets) and what their deposit is
