Regarding any rent increase its illegal and punishable to increase rent, threaten to increase rent or even mention a rent increase is looming.

If you do allow it, I would get him to sign a waiver for it so he can't come back and claim you unlawfully kept his deposit.

If you you even  mention it is a crime punishable by fine.

The 3 month move in cost upfront kind of feels like a punishment if the market as a whole charges 2 months.

The termination notice, called a Three-Day Notice to Pay Rent or Quit, gives the tenant three days to pay rent or move out.If you haven’t followed the rules, and the tenant doesn’t pay or move within the specified three days, you’ll have to file an eviction lawsuit (also called an unlawful detainer).

Wholesaling in many states - including mine - is considered the unlicensed practice of real estate and it comes with a whole lot of bad: "Unlicensed practice of real estate is a third-degree felony punishable in criminal court, for each violation, by up to five years in prison and $5,000 in fines."

Are you effectively punishing them because they are moving out of their home for the first time?

All communication in writing so you can present it to a judge at an Unlawful Detainer hearing.3)After raising the rent, I am 100% sure that tenant will begin to argue and make claims of the legality of raising the large amount at one time.How would you respond to baseless claims of the legality of the rent increase?

Someone may claim (unlawfully) the homeowner tax exemption and still rent the property.

The complicated answer is make sure you have all of your ducks in a row or face punishment.