Would your rental income cover all of that, and if not would you have reserves on hand to handle that?

According to 5, the city has battled efforts to limit local regulation of short-term rentals.The state of Florida recently approved Lee County's minimum standards for vacation rentals, which means that reservations can resume in Cape Coral.

Remember you are using debt to make this investment, not reserves  sitting in your bank account so I recommend a more conservative investment approach. 

Just confirm this statement with your tax advisor.

Yes - include ALL expenses in your math, including reserves for repairs/maint, capex, turnover, etc.

They do conduct a background check, credit check, will check cash reserves, and will make sure the borrower is using their funds for business purpose only, but there is less emphasis on the borrower and more on the deal itself. 

I've collect their photo ID, contact information, and I've been asking all guest to obtain COI from all confirmed bookings prior to their arrival.

It's hard to speak in such broad terms - one man's "cashflow" is another man's vacancy reserve, so whether you can pull it off or not will be somewhat determined by how optimistic you're willing to be.

This way you can calculate how much you can realistically invest and keep for reserves.

Just to confirm, I think you mean live in it for 4 years and rented out for 1 year for 4/5th gain tax free?