That's right, the application is submitted using Form I-131. At a stretch here means a 2 year absence from the U.S. (without traveling back to the U.S.) and 5 year total means you could live abroad for 5 years without losing your green card (by getting reentry permits which can be issued for a total of 5 years).

You can only apply for a reentry permit while in the U.S. so if you wanted to get one, you would need to return to the U.S. and apply and then wait to be fingerprinted or depart and return to be fingerprinted. You then can remain outside while your reentry permit application is pending.