Green is good yellow needs to be looked at and Red is there is something wrong.. you simply walk in and pick up a copy of it on the counter..

STRs in their current form are simply big hotels, and legislation has been slow to catch up because in their original form they were more conducive to residence (someone crashing on your couch for $39/night).  

Any tips on how to identify markets for long term rental income?

The Bloomington-Indianapolis area has diverse submarkets, and identifying the right neighborhoods with growth potential is crucial.

As a buyer this is something you should be able to identify based on your due diligence. 

The values they had before were based on rents that simply weren't sustainable. 

I thought it was simply the difference on percentage of appraised value (4% vs 6%).

You can simply offer a higher sale price to do that. 3.

If it matters to any degree to retain this tenant, if listing for new tenant is a pain, I'd simply call this guy up, I'd be upfront and ask him about all this.

There are many mentorship programs available ofc and Open Spaces was simply a great match for me.