CapEx includes items that happen irregularly and are considered "one-time" items (even though they may occur every few years) like replacing a roof or a furnace.In short, leave the CapEx out of the NOI equation.After all that, let me just point out that if you interest is in knowing the cash left over after everything has been paid, then of course you would subtract out the CapEx as well as your mortgage payments (which are also below-the-NOI-line since they are a financing expenditure, not an operations expenditure).  

Plenty of time later down the road to replace necessary items. 

And don't forgot once you are out of warranty the repair costs can get out of control, not to mention the maintenance items are expensive (compare prices of heavy duty rated tired to standard truck tires for example).

You don't deduct the $100 cash cleaning item and eat it, or you pay $150 for same cleaning and 1099 to deduct it.

.- I don't see you listing many items that are usually separated on expenses; Utilities, Landscaping, Pest control, trash, etc, etc.

Here are the itemized list of things that needs repair.2 units 1100 sqft each unitsRoof - New Roof Required, Gutter issuesOutside steps & railing needs to be replace or fixed.

Taking 5% of the rent when your rent is only $800 is not going to be enough to cover all those big items.

Barn wood, the real stuff, is an artisan supply item that is used for great crafts and interior decor - - there's no substitute for it when it's in the hands of a "craftsman".Just like you don't put Home Depot windows into a Queen Ann or Victorian, a craftsman looking for Barn Wood knows what he wants and will not rest until he finds it.

These comprise items such as the presence of smoke detectors and preventing hazards to small children. 

If you are assuming $180 in monthly capex I think that is far too much considering the amount of new items done to the home.