It's an estimated cash on cash return given current rental rates subtract expenses assuming 7% interest rate, 10% management fee, 5% repairs, 5% capex and other expenses like mortgage, insurance, tax. it's a estimate to tell you what properties to analyze vs ignoreyou can see the are pockets of negative returns as well as pockets of positive return. this is to supplement the data @Devin Conley provided

Mid thirties couple earning very well (more than 8X rent) with a small pet.

Is the option government supplied insurance where taxes supplement the insurance?  

If you are trying to come up with a way to finagle the occupancy requirements while using an amazing loan (that you earned based on your service) like a VA, I would say you are starting off on the wrong foot.

I will not comment as to the tax laws and underlying rules - that is a discussion you can have with your tax advisor who presumably you are paying to help you.What I will do is provide practical and business guidance on tracking time.Firstly, there are apps available that can assist with time tracking where you can specifically detail your time, who you met with, etc.

Taxes and insurance will be another $400+.

I then would have my tax cpa enter in or do it after discussing tax based items (depreciation- MACRS, reserves, year end accruals, reserves, etc.).

The key is that in order to completely defer all tax you must purchase at least as much as your net sale. 

One thing to think about are the tax implications of being a Canadian paying US taxes.

Now consider this: all the groups people are spending fortunes to target—foreclosures, absentee owners, probate leads, tax liens—what do they have in common?