After doing some research, I tend to agree with the comments above.

I would start with -"Hey, Mr Smith, we are moving out tenants so we can upgrade these units, they are way behind the times and we want make sure they are the best they can be, plus we need to keep up with recent code changes per our insurance company, or our rates double, and the city has commented on the weeds and possible rodent issues.....we'll let you know when they are ready in a few months and give you first shot at a new lease" Yeah right..... 

., if anyone has an experience or comments regarding this (by-law/zoning issues).Also, are there any resources that someone can direct me to regarding by-laws for storage facilities?

As some of the other commentators have mentioned you have to know your market and while all of Hawaii has a high cost for entry there are still opportunities to be found.I found a very specific market (C-, 2/1 condos, near major hospitals, pet friendly, low HOA) that I studied intensely and because of that specific focus knew a good deal when I saw it and could quickly get the ball rolling while others were still analyzing.Kauai is such a unique community that you will be faced with nuanced challenges but that also means you may find opportunities where others miss them if you know the market.Kauai is the most beautiful island in the state and has a great sense of community, if you want to move there do it and make real estate work for you, don't go about it the other way or you may be left with more properties but also more regret.

As for the last comment that most threats of legal action, especially those that would be million dollar claims are rare, I would agree with him. 

Would it be best just to write up the new contracts at the new rates and stipulate in the additional comments section that they have until x date(30 days) to decide or need to move out by x date(60 days), those 90 days being at their current rates.

Hi Olga,I'm happy to list a few companies that I get some good reviews and comments here on BP.  

@Bob Wilson hey Bob, I was so intrigued about this comment.

Since no one has commented, I'll recommend Riki Singh with Singh CPA & Associates in Denver for your short list of interviewees.I have not used him, but I've interacted with him. 

I am commenting so I can be updated… the only advice I can offer bud is when you do your HELOC open up a separate bank account move the funds of the HELOC into your private account and then transfer it into the account for the Duplex that way when it comes for taxes you can write off the interest payments for the HELOC.