Spend several days/weeks peeling the paper and refinishing and painting the walls ourselves OR demoing all the walls and rehanging new drywall altogether. 

Price the deal as if you had to demo that area.

If you see yourself doing this kind of demo a lot, a nicer one can be had for around $300.

Hey Sam,If you do demo Rentec, check out their schedule-e assistant report. 

The EPA lets a homeowner do the demo in a home older than 1978 with or without testing it for lead, and even if it's tested and found to have lead paint the EPA still lets the homeowner do the demo in their own home, an investor cannot do this in an investment property.As you probably know the EPA even lets the homeowner do the demo in a house with lead paint and then they can hire a non-certified contractor to do the reno, the EPA won't let the homeowner/investor do this in a investment property.People generally think that by removing or covering all the lead below 5' it's good.

$4-500.To partially demo, fill in could be a few thousand.

This type of damage would likely require setting up a containment, placing that containment under a negative pressure (to capture spores and dust during demo) and doing a controlled demolition - usually by professionals.

Our architect is working on the plans and we're currently waiting for our demo permit to knock down the existing structure.

This weekend we chose to rent a giant dump trailer to finish the demo at our apartment.

Just gutting the place will save you 25% alone on the structure and demo cost.