Also called a CapEx budget, the capital expenditures budget should detail how much money is budgeted for each project. Understand how the CapEx budget is calculated. Are the costs estimated by the sponsor or are based on actual bids from contractors who inspected the property? Accuracy is king in CapEx budgets, so we opt for contractor bids, that way we have a clear idea of what we and our passive investors are getting into. Another important key here is knowing what portion of the CapEx budget is earmarked for the contingency fund. We aim for 10-20% of the total CapEx costs.