And some of them are structured in ways where they produce passive income. 

In truth, my goal has always been to replace my W2 income, so the focus was on the $ coming in every month, and not so much the number of properties.  

Again, not unless its actually that your gross income (including cleaning fees) is 100k a year and your gross rents are actually only 75k. 

Can someone explain the variables that are used to calc the Income-Expense Ratio.

I'm self employed and not showing much income on my taxes.

Ask yourself how much work you want to do (real estate is not a passive income endeavor) and how does it or does not fit into your life right now.

I fully renovated the upper unit with well-above-average finishes, and it's been averaging ~$2,850/month in gross rental income over the past 12 months as an STR on Airbnb. 

As lenders, well issue a prequal/preapproval letter if we've analyzed your income, assets (bank and brokerage statements to establish that you have the liquidity to afford the down payment, closing costs, and reserves), review credit of the guarantors, review the relevant experience to ensure that we're not throwing our money away on newbies that are wandering around in the dark, and have put together a reasonable plan of attack for the project.

@Gary Bonds owning a few rentals is not a business at least according to my accountant, Best to attempt to qualify using your personal income.

Will the capital gains in this scenario be considered passive income from an IRS perspective ?