I've always used the acronym CAPEx to avoid any possibility of confusion with CAP rates ... i.e. if I we allocated a CAPEx of 5%, no one will mistake the property is a 5 CAP ;-)

The contract would allocate a set value for each asset and payments would be applied first to the asset with the highest value, with the final payment being applied to the asset with the lowest value.

I observed a Cadillac SUV in the garage allocated to apartment 2nd floor unit.

The fund I work on focuses on Class A, stabilized product in core markets with allocations in build-to-core developments and some value-add assets. 

Just to confirm, you would allocate some of the rental income to protect you against somebody vacating the apartment (s, correct?

I have spent a good amount of time with some larger syndicators understanding their capital strategies (no one on BP) and I would say that the thought is that the larger investors will eventually get tapped out on their allocation to you, will get tied up in other investments in a downturn and/or will find other investments at the wrong time for you and thus the mentality is to build that list of repeat business and keep doing deals.

Vacancy doesn't happen (at least for me) in the Boston area so allocating for vacancy would be overly punative.

You have to factor in closing costs, break out the portion allocated to land since land is not depreciable, separate the loan costs and amortize them over the life of the loan, etc.If the property is sold (absent a 1031 exchange), you will have to recapture the depreciation up to the amount you benefitted from the depreciation deductions while you held the property.

In most cases; unless you're allocating ~2million or more in capital, spread over a handful of deals; I wouldn't invest in a syndication for steady passive income.  

Second, it creates an unfair/disproportionate allocation of income tax liabilities to the partner that is cashing out.