Episode 40: Determining Property Occupancy

Most note investors underwrite the numbers but skip the question that often matters most — is anyone actually living there? In this episode, we break down how to determine property occupancy before you close and why it changes everything about how a loan resolves.

🔍 What you'll learn:

✅ Why owner occupancy signals emotional equity — and how that motivation drives better resolution outcomes even when the numbers are tight

✅ The three occupancy categories every investor needs to understand and how each one affects your strategy

✅ How to use county tax records, credit reports, and bankruptcy filings to build an occupancy picture from public data

✅ When a formal skip trace is worth ordering and what it surfaces that free sources cannot

✅ Why occupancy is a research process — and how triangulating multiple sources leads to better decisions than trusting any one of them

This program is for informational purposes only and should be independently verified before taking action.

Transcript

SPEAKER_00 0:00

Welcome to the show, where you'll learn how to invest in mortgage notes, the savvy real estate investor's secret weapon to create cash flow without tenants and property acquisitions for pennies on the dollar. My name is Robert Haitha, founder of Fix Notes, and my mission is to make note investing ethical, profitable, and accessible for you. In every episode, we're democratizing the industry to put these powerful Wall Street assets into the hands of Main Street investors like you. So without further ado, let's get into the show where you're in good hands with my AI clone. Let's go. This program is for informational purposes only and should be independently verified before taking action. Whether or not a borrower is living in the home you hold a lien against is one of the most important things you can know about a loan. It tells you something that no spreadsheet can fully capture. The borrower's emotional connection to the property. A homeowner who is raising their kids in that house, going to work nearby, and maintaining their life around that address has what we call emotional equity. They want to stay. Even when the numbers on paper are challenging, that motivation creates real leverage in the resolution process. A vacant property tells a very different story. Occupancy falls into a few categories. The best scenario is owner occupied. The borrower lives in the home. The next is tenant occupied. The borrower has moved out, but someone is living there and the property is being maintained. The most difficult scenario is vacant. A vacant home is exposed to deferred maintenance, code violations, deteriorating condition, and the risk that the borrower has simply walked away with no intention of engaging. Every one of these scenarios affects your resolution strategy and your pricing. Because no single source will definitively confirm occupancy, the right approach is triangulation. You pull information from multiple places, and where the data points agree, you build confidence in your conclusion. Where they conflict, you know you need to dig deeper. The first place to check is the county property tax record. Counties mail tax bills to the address the property owner has on file. If that mailing address matches the subject property address, it is a meaningful signal that the borrower is living there. If the mailing address is somewhere else, the borrower has moved, though you still do not know whether the property is vacant or tenant occupied. The second source is the credit report. As we covered in a previous episode, most credit reports list up to three addresses with dates. The most recent address is typically where the borrower is currently receiving mail. If that address matches the subject property, it adds another data point supporting owner occupancy. If the borrower has filed for bankruptcy, the voluntary petition is another source. Borrowers are required to list their current address in that filing. Checking that address against the property address is a quick and reliable data point, and the bankruptcy file is public record accessible through the federal PACER system. A basic Google search can also surface useful information. Skip trace providers, public record aggregators, and in some cases social media accounts can all point you toward a current address or confirm that a borrower is still associated with the subject property. This is less reliable than the formal sources, but is worth a few minutes when other signals are conflicting. The most comprehensive option is a formal skip trace report. These reports pull from utility records, creditor records, vehicle registrations, voter registrations, and a wide range of other sources to give you the clearest possible picture of where someone is living. A quality skip trace provider will give you an address summary with confidence levels, and this is often the deciding factor when the other sources are pointing in different directions. Once you have run the data, you are looking at a picture built from multiple inputs. If three out of five sources confirm the borrower is at the property, you can proceed with reasonable confidence that it is owner-occupied. If most sources suggest a different address, you call it non-owner occupied and then try to narrow that down to vacant or tenant occupied through additional research or through the skip trace. The bottom line is that occupancy is not a checkbox. It is a research process. And the investors who take it seriously understand their deals better and resolve them more effectively than those who just assume and move on. Next time, we are going to look at property taxes, how to research the tax status independently, what it means when taxes are passed, due, or sold, and how it feeds into your overall risk picture. Thanks for sticking around to the end, and thank you to my trusty Robot and the Fixed Notes team for putting together another episode. If you want to learn more and hang out with the real not AI version of me, join our free school community at school.com slash fixed notes. That's s ko l dot com slash f I X N O T E S. In the meantime, we'll see you in the next episode.