The vandalism was reported at around 6:45 a.m.
Los Angeles Police Department officials said the Cleveland Cavaliers star was not at the residence at the time of the incident.
Investigators said they will look into surveillance footage from the area, hoping to find clues as to who was behind the vandalism.
By the time officers arrived at the home, the racial slur was covered up by property management, police said.
The incident is technically being investigated as a hate crime, though it has yet to be officially classified as such.
The LAPD's West L.A. Division is investigating the incident.
James is likely with the rest of his team getting ready for Game 1 of the NBA Finals, which starts on Thursday.
Report a typo to the ABC13 staff