The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

Luckily all of my rentals experienced minimal damage compared to so much destruction I've seen all around them.

The franchisees have little to no net worth to speak of and minimal liquidity on average.

I dont have all the facts, but I would lean towards a HELOC because there may still be some 75-80% LTV options out there and the closing costs are minimal. 

No maintenance hardly at all, no grass, modern irrigation systems, minimal required landscaping.

Reserves are minimal.

However, that would minimize liquidity were there to be an emergency where that cash was needed in a more immediate sense.

One thought on the remodels if you could get one unit vacant, remodel that one, and then move an existing tenant over to the remodeled unit, repeat the process until you are done.I have done that before and it's worked out well for everyone, the tenant gets a fresh place to live and the disruption is minimal.

Also, are there any creative ideas around how to minimize risk and/or generate some negotiating leverage here? 

While this may lead to a lower rent and higher near term it will minimize your losses near term.Additionally, if you do have to rent for a lower rate than you are expecting you could always do a shorter term lease agreement.Best of luck,John