The One Thing That Determines Your Entire Resolution Strategy

Before you price a note, before you plan the workout, before you do anything (except for confirm the note is secured) — you need to answer this: who's living in the property?

Because your entire strategy changes depending on the answer.

Owner-occupied: Best-case scenario. The borrower has "emotional equity" — the attachment to their home, their kids' school, their neighborhood. They're far more likely to pick up the phone, negotiate a modification, and follow through on payments. This is where loan mods and DPOs happen.

Vacant: Worst-case for holding costs. Vacant properties attract city fines, frozen pipes, vandalism, copper theft. If a property sits vacant long enough, the municipality can condemn it. Your collateral value erodes every month you're not resolving. On the flip-side - these are the deals you have a clear path to REO if you want to acquire the property.

Tenant-occupied: The wildcard. If someone is collecting rent on a property where the mortgage isn't being paid, you have unexpected leverage. The borrower is generating income from your collateral and choosing not to pay you (and like the deal

@Taylor Doucet

is looking at in TX, can add some uncertainty.

The problem? The data tape often won't tell you any of this. Neither will an AVM.

This week's podcast covers occupancy triangulation — using tax mailing addresses, bankruptcy filings, BPO drive-bys, and even trash-day observations to figure out who actually lives there.

Listen here: https://fixnotes.com/blog/episode-29-vacancy-vs-occupancy

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