While this is at least something, I just want to make sure that I'm maximizing my current cash reserves before exhausting it on a single option which provides a low amount of cash flow.So I'm just trying to work through all of this and determine what the best course of action is with respect to making progress at a reasonable pace in my market.

If the contractor countersues, wins big, and all the homeowners end up with huge assessments, you may end up in a position of not being able to repay the loan and they don't want unhealthy collateral they will have trouble selling.  

I would assess it's value based on a similar size/similar rent as a duplex or other rental in the area.

IRS i get but do you have to pay town taxes and assessments if they didn't put a lien on?

Make sure there's a good spread between your total input and the assessed/market value of the property.

Regardless of what the owners want to imagine it is worth, your job as an investor is to assess what it is actually worth with hard numbers and offer accordingly.

I've made plenty of mistakes (nothing colossal) and none have derailed my progress.  

I have read great material such as this article on Investopedia, but I am confused as how these taxes are really assessed and how I can estimate property taxes when analyzing a property.I looked up the home I currently rent in located in Jersey City, NJ (via this Jersey City gov link), I found that the property tax changed every two quarters.

I'd be happy to give you an honest assessment of your home as a rental, if you'd like.  

You should get in at least every 6 month's to do a quick assessment of interior.