Appreciation with its tight coupling to rent growth, results in cash flow.An example from my market, a few years ago core logic indicated the average rent increase in my market was ~$600/month.  

Population growth, job diversity, and low DOM (days on market) are significant indicators.

At this point I know their income is sufficient, they have indicated they dont have a criminal issue, bankruptcies, and evictions. 4.

All indicators point to this being a criminal enterprise.

We keep seeing conflicting views but my personal experience with buyers indicates that the outlook is positive.   

Since you have no contract, there is nothing that says you do not have to pay if you are not satisfied, and your spreadsheet would seem to indicate you owe him the money.Similarly, since you paid him for previous work on the spreadsheet, and the spreadsheet shows you owe him for additional work, your argument is not very strong.

I have looked at Hopatcong however despite allowing STRs, it has language that requires the STR to be the principal residence of the owner as indicated by something such as a diver's license.

The historical appreciate indicates it will not keep up with inflation and therefore loose value in inflation adjusted dollars.  

I have seen a tax attorney on YouTube specifically saying you can take a full year of depreciation even if you buy in December but all I see in the IRS publications indicates that you have to prorate based upon the time it was available to rent.is there a rule I am missing?  

As others noted, most municipalities issue future zoning maps which indicate the direction the local planning commission or equivalent wants to take their zoning and if your plans are consistent, that's generally a good indication as well.