Most people who invest in LA speculates on appreciation, as oppose to cash flow.

It's all about speculation that prices will appreciate and rents rise to a level when you can be cash flow positive.

In a hot market, investors are looking for guaranteed deals, not speculative projects.If you are buying and renting, you'll want to ensure your market rent is no less than 1% of your purchase price + repair costs. 

Buying something and crossing your fingers hoping it will appreciate is pure speculation.

There is a bit of speculation involved and if homes are not moving that quickly in that market, you could see some time sitting on the market with hefty holding costs.  

The foreclosure procedure appears to have been made some time ago, under federal law, any borrower must be given notice, regardless as to what may have been agreed, IMO.If you have a NPN first, simply include the balance of the second, if you hold the second, better cross your fingers and pray, but I can't see you holding a housing development note either.Call the development office, they should tell you how they view the lien and your position, it's best to clear the air than to speculate, but I wouldn't have an issue with that mortgage.

At 100% occupancy, it "might" be worth the $250k, again not knowing what deferred maintenance is really present.A lender will not be able to speculate about a real property value on this, that will require an appraisal.

If you are getting a positive cashflow you are investing, if you are betting on appreciation then you are speculating.

Pure speculation, cause obviously there is a lot we don't know.

However, rent you receive from real estate held for speculation or investment is not subject to SE tax."