4plex with below market tenants, how to best approach raising rents in California?

[Bryce Gubler]

Hello BP!

I just closed on my second 4plex in Emeryville this week, which is 75% occupied, and every unit is renting below market (~$250-$1500 less). This is the breakdown:

1. 2 tenants on month to month leases ~$250-$350 less than market
2. 1 long term tenant (15yrs) is now on month to month lease and is paying $1500 less than market

After consulting with a couple of people and doing some research, it sounds like anything over a I should apply banking rent raise and submit a 60 day notice (all of these units fall into that category). And once I complete renovations, I will apply a CapEx rent raise. Do I need to have them sign a new lease to raise rents. If so, do I need to wait a full year to apply the CapEx rent increase?

These are the options I'm currently exploring:

1. Do the proper notice on the 3 month to month units and stagger the increases, starting asap, so I only risk losing one tenant at a time. This way, I would likely only lose 1 tenant at a time, max.  
2. Any thoughtful ideas or suggestions would be greatly appreciated.  For example, if this were your property how would you proceed? Are there other options I haven't considered?

Thanks,

Bryce