We improved and sold it when we PCSd and then bought another owner occupied house in the US. 

Not most of them, as they simply raise the cost basis of your "inventory" and get deducted when you sell.  

I have the backing of my families construction company Two Bridges Home Improvement Llc.      

Since you're looking to use a VA loan, I assume that what you're looking for is a "house hacking" opportunity on a small multi (duplex to 4-plex) where you can live in one unit and rent the rest out.You're still going to have to find a deal so that you can cash flow and multifamily is a market with less inventory than single family (obviously)... so it may take some time.

I have not been able to negotiate out the restriction even on their older inventory. 

You have to take the basic tips and ask yourself how you can improve upon them to build YOUR business.

There are also turnkey rental providers that are now carrying large inventories of similar type and priced rentals that might be good replacement options as well.

There is not a lot of inventory on the MLS, courthouse foreclosures are going for retail prices, and homeowners are receiving 10 letters from different investors.  

The only reason I'm selling is due it being a class D property/neighborhood, and I'm looking to improve my portfolio class, and id rather not fix anymore bullet holes.Buyer did inspections and came back with a laundry list of repairs, trying to justify a low ball reduction to $70k, minus 5% comm.  

It's all about the guarantor on the lease, experience in that chosen industry, a track record of success, liquidity and net worth of the guarantor, and how easily attachable the assets are if something goes wrong.For instance I would never front money for tenant improvements on a business that is not a proven performer.