These houses were built by a company and are all on its own private street and pretty much identical to each other.  

A couple of suggestions, please find and verify the amount of times the property has truly flooded.

In my experience with multi-tenant leases for a single unit, one thing we have verified is that each individual tenant could carry the lease themselves if need be financially.

Maybe even along with some kind of satisfaction metric by the owner.Also things like macro trends for rents and appreciation by neighborhood.Maybe even a way for turnkey providers or other real estate professionals to aggregate data on all the deals they've done that could be verified by a 3rd party so you can you really drill in detail into what to expect.Super new to the space so it's possible these are really bad ideas!

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. 

It would be hard to prove that you are treating the asset and the LLC as a separate entity, thus benefit from its separate identity.