It’s also likely that the repairs amount will exceed the ARV.ARV: roughly $60-$70K Should I buy and hold this in hopes that the area improves? 

And once it is complete then do a refinance and use the proceeds to take out the original note and pay your improvement fund back.

It will eventually rent at the right price and as the weather improves. 

If you have a park that requires heavy lifting to fill spaces, sell homes, complete major capital improvements, etc, I would not recommend a 3rd party.

Is there an opportunity to raise rents at lease end or to improve the units at turnover in return for higher rent? 

I believe it improves the comfortability of the tenants who lives there.But it has to make Common Sense, Dollars Sense and Business Sense.  

@Joe Vahedi Every project I've done with recently added units has had some level of difficulty with appraisals - I have had to go out of my way to prove that the additional unit is permitted and compliant with zoning in order to qualify it with the underwriter and the income from it.Here's Fannie Mae's guidance on it: https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B4-Underwriting-Property/Chapter-B4-1-Appraisal-Requirements/Section-B4-1-3-Appraisal-Report-Assessment/1736875861/B4-1-3-05-Improvements-Section-of-the-Appraisal-Report-10-24-2016.htm#Accessory.20UnitsLenders and underwriters can speak to the details better than I can, but I would be VERY cautious about assuming a building with an unpermitted unit (even if typical for the neighborhood) would appraise with that unit included. 

Before listing the home, the agent shouldn't have let you price it where it is, or should have suggested ways to improve the renovation you completed.

I am open to any opinions anyone can share or creative strategies I can use to improve this deal.

Due to improvements to surrounding properties and lack of supply in the local market I'm expecting 875+ per unit (Neighboring sister units just leased for 850)Lessons learned?