You will increase your cash flow investing in multi unit purpose built properties and will likely be looking at a commercial mortgage.Purpose built multi unit rentals is you best option to grow your investments and your income. 

Given I'm looking for buy and hold for over 10 years would you recommend this deal as good deal.If I assume conservative 1% appreciation and 2% rent increase, I get around overall 9.5% return over 10 years.  

You'll need to run sprinklers throughout the house (costly for a number of reasons, especially if you have to increase the water main size), have an enclosed trash area with a drain, have electrical exist signs at the egress points in the house, and they will ultimately require you to become ADA compliant.

Can you offer any tips on refinancing mobile home and RV parks after expanding and increasing occupancy?

Also look at the potential rates and with the same calculation that’s the value that you could add to the property by doing some rehab and increasing the rents.

Now that rents are increasing he is looking to buy. 

I highly doubt this place will appreciate anytime soon.No rent increases in sight.

(rents are increasing in the area, but we are heading into fall/winter where the tenant pool is lower) Assume that you would get pretty much all your money out on the refi.

Typical FHA loans are 3.5% down, but you can increase that number if you want.

I would generally give them 30-60 days notice regarding new rent increase so that the tenants can adjust to the rent hike.