And that property looks good.  

You should be able to take out a small loan using the property as collateral.

So the property owner can never sell?

Also make sure you are comfortable with some holding costs if the units don't get rented right away (if vacant).Also look into if there is rent control in the area that the property is located.

But with only a dozen properties in only 2 states I’ve definitely not found a use for one yet.

My lender is suggesting me to buy property under my name and then transfer it to LLC later as there are not many financing options available for LLC.

A property hoarder keeps properties just to keep them.

I imagine people who've had 2nd or 3rd houses in hollywood hills are not interested in rebuilding or doing the work.  How do I go about finding those who'd rather just collect the insurance money then sell it off at a...

3) Buy a few out of state properties directly through an agent and work with a property manager to manage them? 

There, now it will appraise as a FORMERLY illegal bathroom, current storage closet (appraisals are about the CURRENT property, not speculation about what the property might once have been historically).