Do I need to see some kind of paperwork that verifies the rental rates are the same amounts that the seller says they are? 

I have looked at the HUD Guidelines to verify that this is possible.

The seller never bothered to get a CAL (Commercial Activity License) or rental license, but has applied for one to verify the property is correctly zoned. 

If you still are thinking about it, do a complete background check, verify employer, past 2 landlords (the last one might lie to get rid of them) , pull their court cases in your local jurisdiction, look at the interior of their car, take a photo of their ID, etc...

These fines can be back dated to every day they can verify you were out of compliance. 

If he is legit doing his job, he needs to verify that no new comps popped up or market conditions changed that significantly change his estimate of value.

Frankly, I don't even know how the magistrate and the prothonotary are going to handle the appeal since I assume you don't have an actual lease with them to verify the rent amount.

However, for any duration more than a few years San Diego beats every Midwestern city for RE ROI for any duration.  100% verifiable. 

I did just find a company who does both and I think it's around 20% total, but I have not had a chance to speak with them to verify. 

So if you're investing in multiple deals, you'll need to gain some understanding of the markets, review sponsor track records, verify their financials projections make sense and that they're using reasonable assumptions, make sure the fees aren't excessive (fees vary for each deal).