Also, keep in mind, his cap rate is actually determined by what he paid when he bought it, not what he thinks he can get for it today.

No: it’s determined by current value, since there’s such a thing as opportunity cost. Assuming all-cash for the sake of the argument. You bought a house for $150k that’s capping at 8% based on $150k right now, but is actually worth $300k at this point. Income: $12k.

Sell for $300k, buy something else for $280k (less $20k for expenses incurred in the deal). The new one caps out at 8%. Income: $22k.

Look at INCOME POTENTIAL, not cap rate based on sale price 15 years ago!