"Loss to Lease" on verbal lease extension?

[Justin Hennig]

What would you do to maximize the rents without 12 months of "loss to lease that amounts to $4-5k?

Just bought a multi-family property and have a tenant group paying $300-400 below market with a dead-basic 1 page written lease about to expire but claim to have a 12 month verbal lease extension with the previous owner at same price...Rents are low (about $1450, should be 1750-1850) and I want to raise them but they (and seller) claim they agreed to another 12 months, which is supposed to start in about a week.

For emphasis, there is nothing in writing regarding an extension.

Furthermore, none of them were screened by the seller (I think they'd agree to a background check).

I want to do some repairs including painting and remodeling if they agree to an increase, but don't feel it's justified at the low price they are currently paying.

Your thoughts are appreciated!