Fair Housing Act: Rehabing an 8-plex and raising rent

[Zachary Wilder]

My partner and I are thinking about purchasing an 8-plex in a B/B+ area that rents to B-/C+ tenants. All units (except 1) currently rent for 450/mo and are identical layouts. Some units are in a good state with good tenants and don't require immediate attention, while others are in pretty dire need of repairs, upgrades, and new tenants.

Our initial plan is to gut and rehab the worst of the units first, followed by finding new tenants for these same units at closer to 700/mo rent. The plan is to then continue upgrading the rest of the units, slowly raising rent along the way. We think we can eventually achieve a final rent of 800/mo per unit.

This property is in a college town, so transitioning from blue collar tenants to potential college student tenants is an idea being tossed around. Is it a bad idea to mix these two demographics? 

My overarching question is: do we run the risk of being hit with a Fair Housing Act lawsuit by varying the rent as well as the quality of each unit depending on what we upgrade first? Or should we plan to rehab everything at once and keep a flat rental rate across all units?