The properties I am looking at will cash flow a teeny bit, enough to cover mortgage, interest, insurance, and 20-30% for repairs and vacancy.

Make your pictures bright and attractive.

This is specific to single family homes, so you could definitely lower these amounts, especially CapEx, for a condo where most of the major expenses will be covered by your HOA.  

I will be down there for closing to do some basic work and then back down there once the contractor completes the rehab we are doing, at which point I could take pictures and list the property on postlets.

And his rent covered my mortgage with just a little left over each month.

The rent from the 3 rooms more than covers my mortgage and utilities. 

I’m just trying to figure out why we don’t want to look at the overall picture when making such investment?

As far as 10% interest and 3 points vs 13% interest is concerned, covering their bases, TVM, etc.2.

The lender will need to ensure your net operating expenses can cover the debt and they can't establish that without solid financials.  

Those pictures look amazing!