The taxes are calculated on your gross income from the rents.

What is the annual  gross / net income? 

New house @ $175000 must gross $1750 when you move.

But as you underwrite deals, you will always be able to hold the basic structure in your mind, then work the details on each deal in a spreadsheet that you can easily build yourself.Basic rental income and expense summary:Rental Income from all units, also called Gross IncomeLess Vacancy Factor (typically 5%)Equals Gross Adjusted or Effective Gross Income (has various names, but this is what I call it)Less Operating Expenses and ReservesEquals Net Operating IncomeThis fundamental formula applies to all income producing properties, apartments, office, retail, self-storage, etc.

I had 3% down (~$3,700), ~$20k in expenses, and I grossed ~$60k when it was sold.

See B3-3.1-09, Other Sources of Income, for boarder income requirements, and B5-6-03, HomeReady Mortgage Underwriting Methods and Requirements, for accessory unit income requirements.https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html#Boarder.20IncomeBoarder IncomeIncome from boarders in the borrower’s principal residence or second home is not considered acceptable stable income with the exception of the following:When a borrower with disabilities receives rental income from a live-in personal assistant, whether or not that individual is a relative of the borrower, the rental payments can be considered as acceptable stable income in an amount up to 30% of the total gross income that is used to qualify the borrower for the mortgage loan.

Without seeing a Profit and Loss Sheet, I am going to guess at gross monthly income 192 units X 50% occupancy X $45 Average Monthly Rental equals $4320.Assuming $50K down payment, financing $275,000 for 20 years at 8% would be a payment of 2,300.Guessing at Property Tax is $3600 per year, or $300 per monthGuessing at Insurance at $3600 per year, or $300 per monthGuessing at Property Management at 10% or $500 per monthGuessing at Repair costs of $150K,So some quick estimates on potential Cash Flow before repairs looks like:$4320 gross income - $2300 Mortgage, - $300 Property Tax.- $300 Insurance- $500 Property Management. - $300 UtilitiesSo a rough cash flow of $620 per month, $7440 per year, so the CoC return with $50,000 down payment and $10,000 in closing costs, and start up costs, looks like about $12.4%.If $150,000 in Repairs, Fencing, Lighting and Signage increased the Occupancy Rage and Average Rent, I think the numbers might look like: 192 units X 85% occupancy X $55 Average Monthly Rental would equal gross monthly income $8976$425,000 for 20 years at 8% would be a payment of $4062So a potential Cashflow would be $8976 gross income - $4062 Mortgage, - $300 Property Tax.- $300 Insurance- $500 Property Management. - $300 UtilitiesEquals a monthly Cash flow of $3514, or yearly return of $42,168.   

I understand that, as a buy-and-hold investor, it is important to set aside a certain amount of cash in order to cover maintenance and capital expenditures.It seems a bit odd, though, that these are typically expressed as a percentage of the gross monthly income.

With out seeing a Profit and Loss Sheet, I am going to guess at gross monthly income 192 units X 50% occupancy X $45 Average Monthly Rental equals $4320.Assuming $50K down payment, financing $275,000 for 20 years at 8% would be a payment of 2,300.Guessing at Property Tax is $3600 per year, or $300 per monthGuessing at Insurance at $3600 per year, or $300 per monthGuessing at Property Management at 10% or $500 per monthGuessing at Repair costs of $150K,So some quick estimates on potential Cash Flow before repairs looks like:$4320 gross income - $2300 Mortgage, - $300 Property Tax.- $300 Insurance- $500 Property Management. - $300 UtilitiesSo a rough cash flow of $620 per month, $7440 per year, so the CoC return with $50,000 down payment and $10,000 in closing costs, and start up costs, looks like about $12.4%.If $150,000 in Repairs, Fencing, Lighting and Signage increased the Occupancy Rage and Average Rent, I think the numbers might look like: 192 units X 85% occupancy X $55 Average Monthly Rental would equal gross monthly income $8976$425,000 for 20 years at 8% would be a payment of $4062So a potential Cashflow would be $8976 gross income - $4062 Mortgage, - $300 Property Tax.- $300 Insurance- $500 Property Management. - $300 UtilitiesEquals a monthly Cash flow of $3514, or yearly return of $42,468.What am I missing in these numbers?

You are correct, you are not going to get a 1%/month gross rental yield.