I got the property off-market for $250k from a trusted family friend.

Based on your question, I'm assuming you're looking to flip this property rather than rent it out, is that accurate?

I walked to the house and met a man who says he was cleaning out due to the loss of their mother in some few weeks back.The guy told me she is  left with 12 years mortgage on the property to pay the bank.

I have recently just purchased my 4th investment property all in my name and have accumulated a DTI of 45.9%.

I have an opportunity to purchase an investment property that is NOT ON THE MARKET yet.

Keep in mind that inexpensive properties are inexpensive because they are less desirable properties in less desirable areas and attract less desirable tenants.

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...

You’d probably end up with a bigger after tax gain if you sold the 2nd property for any amount of money and did that.

Virtually everyone lives somewhere especially true for those that pay taxes (in CA property and income tax).  

Quote from @Garry Lawrence: I need advice on a serious situation involving a property I’m about to buy.