Mobile Home Park - Value Add problem

[Virgil Nethercott]

I am looking at a park that is being sold for 12% cap rate which is lower than I would like (prefer to be at a 13-15 cap for this area). It is an off market deal that I came across and have been talking to the owners about. Its a fully occupied park of 60 spaces and has a good portion of park owned homes but that 12 cap is the value with just the lot rent. The town is a small town in the mountains but it has 3 large mining companies that have been there forever and is what made the town, a town.

Here is my problem... The lot rents in this park are $115/mo which is very low to me, but the park is a well run and nice looking park. In my due diligence I discovered that the 4 other parks in the town are $115-$150/mo range as well. In my opinion I feel like all the MHP's are undercutting themselves and they should be at $250+/mo. 

I have searched the demographics of the town, they have a low population (3000), Low unemployment, and high per capita incomes (From the mines). 

Additional information:

1. The park owned homes rent for an average of $550/mo, I agree with this pricing as I have looked at MH's in the area as potential rentals. 

2. Bestplaces.net (my demographics source) is showing a negative "recent job growth". I will include a screen shot that shows the quick demographics.

3. All the other parks are full so no one can move their trailer to another park.

Based on the information that I have presented and any information you would like on it, do you feel this small town could sustain a rent increase up to $250/mo?

[Bill F.]

@Thomas S. What you just suggested is the definition of price fixing and it is illegal in the US. 

https://www.justice.gov/atr/price-fixing-bid-riggi...

Now if someone did a rent survey combined with the budget of a the area's median worker, which they sent to the other owners, that illustrated the average tenant was using significantly less than the standard 25% of their gross monthly income on housing, then that is a different story. 

Getting all five MHP owners into a room/email chain/group text and saying if they all work together they can improve their bottom line: that's a way to end up in front of a grand jury never-mind furthering the stereotype of greedy slumlords.