I've purchased two homes with VA and done VA IRRLs over last 9 years and I've always thought entitlement worked as you do, but I finally learned the true nature just 2 weeks ago.

I sodded the lawn and had the lawn serviced by a company which is incorporated in the rental price.

Incorporated a 5% vacancy. 

@Chris Allen, if you want to be thorough, make sure to account for the following expenses:1) Mortgage2) Mortgage insurance (PMI or MIP) or FHA Risk base3) Property Taxes4) City Taxes5) HOA (Home Owner’s Association) Dues and Fees and Assessments6) Insurance  a) Property Hazard Insurance (0.3-0.45%)  b) Flood Insurance  c) Earthquake Insurance  d) Umbrella Insurance7) Vacancy Rate (usually 8% - the equivalent to one month a year, or 5-6% if multifamily and/or if experienced, if not use 8%)8) Utilities (you’ll have these if your tenant is not covering them and/or during vacancy)  a) Water § Sewer § Garbage  b) Electricity  c) Natural Gas  d) Propane9) General Maintenance (usually 5%)  a) Upkeep § Landscaping  b) Snow removal  c) Repairs  d) New Appliances  e) Make ready10) Capital Expenditures (usually 5%, higher is the property is old and obsolete, less if fully rehabbed and all mechanicals and roof are new)11) Property Management (8%, even if you self manage, your time still has value and there might be a time when you'll want to be completely hands off or you'll not be able to do it, vacation, retirement, etc.), including...  

Here at least it would be a simple matter of going to the assessor and requesting the tax parcels be merged....which would not in any way change the nature of either the mapped or legal lot status.

But even so, natural gas could be ignited by other things too.It seems like every natural gas detector I see online is "plug-in" only.

Turnkey by its very nature you are paying a premium for. 

I have been an investor much longer than an agent and naturally work with a lot of young investors, which is something I am passionate about.

My fear is, that if i sacrifice the location, it will either depreciate naturally or since it is not in a desirable area, after the market evens out, the properties value will never even get back close to what i purchased it for.I know i should be searching for a deal to make this purchase the best possible case scenario but i am unsure how to tell when it is a deal if its already rehabbed.

I would very much appreciate hearing about the nature of your management relationship with your out of town friends if you are willing to share.