Officials said Palacios was seen by friends Friday afternoon at 4710 Ward Blvd., the home of a convicted felon.
The owner of the house, Gregory Parks, 55, was convicted of manslaughter and attempted rape in the 80s. In 2013, he was convicted of two counts of participating in prostitution with a minor, and was given a decades-long prison sentence.
The Court of Appeals overturned his conviction last year, citing insufficient evidence.
“Served my time … did it honorably,” Parks said. “Like a man.”
Parks said he and Palacios were partying the night before she went missing.
“We were friends,” he said. “We were having a little fun.”
Parks said Palacios left his house Friday afternoon around 2:30 p.m. Palacios allegedly told Parks she was planning to meet someone, but she didn’t specify who she was meeting.
“She left my house. We couldn’t find her keys," Parks said. "She asked me if she could leave her car. I said it would be safe. Nobody is going to bother your stuff there.”
Palacios called someone to pick her up, according to Parks.
"I gave them [police] all the information that I had," Parks said. "I don’t know their habits, as far as where she was going, who she was meeting."
Police have not named Parks as a suspect, or a person of interest.
Gloria Cortez, Palacios' aunt, said she has been concerned for the safety of her niece since Monday when one of her friends contacted her through Facebook.
"She asked me if she was OK because she had heard Isabel was hurt," Cortez said.
Unsure what that meant, family members said they began to contact hospitals, but they were not able to locate her.
Neighbors who live nearby said they are not sure what to make of the news.
"I thought it was really peaceful and quiet over here," said Shontell Taylor. "I am just ready for some answers really."
Palacios' mother, Dominga Palacios, said she just wants to know if her daughter is OK.
"We just want to hear something from her, to know that she is OK, to know that she is alive," she said.
Palacios is 5 feet, 2 inches tall, has brown hair and brown eyes. Friends and family said Palacios often carries a black purse with a black bow.
The search is ongoing, and detectives are continuing to investigate the Ward Boulevard location for additional information.
Anyone with information about Palacios is encouraged to call the Wilson Police Department at 252-399-2323 or Crime Stoppers at 252-243-2255.