Long term tenant paying under market rent. What to do?

[Chris R.]

I just purchased a tri-plex and I'm closing 9/20. The building will be owner occupied though it is currently fully rented with 3 month to month tenants. Unit 3 is occupied by a 12 year long term tenant (high quality, consistent) who has essentially made it his home with his son.

I have a few predicaments here.

1. The 3 tenants are all paying under market rents. Unit 1 - $825, Unit 2 - $950, Unit 3 - $825 (Total $2,600/mo). I analyzed and purchased the property knowing median rent for my area and property type/quality pulls in $950-1100/mo. The biggest problem is telling a tenant of 12 years that I need to increase his rent by $200. One suggestion made is to raise by $100 and inform him that I should be raising $200..but his good standing has earned him the discount. I think I'd go for that.. but am I really robbing myself of $1200/year? 

2. 2nd issue is the owner occupy issue with 3/3 units occupied. I need to evict the 1st floor tenant so I can move in.  Am I going to be responsible for eviction or do I make that a responsibility (fees included) of the seller before closing.

What do you guys think. I have other questions but I'll post them as separate discussions to stay organized. Thank you!!