Police detectives were working to determine if her death was the result of foul play or an accident.
LAPD Sgt. Rudy Lopez called it suspicious and said a coroner's investigation will determine Lam's cause of death.
Before she died, hotel surveillance footage showed Lam inside an elevator pushing buttons and sticking her head out the doors, looking in both directions. She was later found in the water tank.
Lam, of Vancouver, British Columbia, traveled alone to Los Angeles on Jan. 26 and was last seen five days later by workers at the hotel.
Lopez said the hotel has four cisterns on its roof that are each about 10 feet tall, 4.5 feet wide and hold at least 1,000 gallons of water pumped up from city pipes.
Lam's body was found Tuesday morning at the bottom of one cistern that was about three-quarters full of water, Lopez said.
The opening at the top of the cistern is too small to accommodate firefighters and equipment, so they had to cut a hole in the storage tank to recover Lam's body.
The cisterns are on a platform at least 10 feet above the roof.
To get to the tanks, someone would have to go to the top floor then take a staircase with a locked door and emergency alarm preventing roof access.
Another ladder would have to be taken to the platform and a person would have to climb the side of the tank.
Lopez said there are no security cameras on the roof.
Lam intended to travel to Santa Cruz, about 350 miles north of Los Angeles. Officials said she tended to use public transportation and had been in touch with her family daily until she disappeared.
The Cecil Hotel was built in the 1920s and refurbished several years ago. The hotel is on Main Street in a part of downtown where efforts at gentrification often conflicts with homelessness and crime. It had once been the occasional home of infamous serial killers such as Richard Ramirez, known as the Night Stalker, and Austrian prison author Jack Unterweger, who was convicted of murdering nine prostitutes in Europe and the U.S., the Los Angeles Times reported.