I liked David Green's answer the best which was offer a credit. 

I have absolutely no reservations about how green I really am!

Many people can’t see beyond a green colored rug.3) location shifting in value—old school owners giving way to new population, ideally young professionals4) value add-can you make. 2 bed into a 3 bed.

I recommend David Greene's book on BRRRRing and J Scott's book on Estimating Rehab Costs if you need more guidance. 

David Greene did a great job breaking down the BRRRR strategy here.

We discovered the humidity problem from one of the tenants seeing a small amount of green mold (this is a fairly new tenant).

You are green and don't know what you don't know.It is important to get a good agent who is familiar with the area and the rules around STR's.

One of them has a green card, and the other does not.Both are in India now but used to live in the USA.Assuming I follow all the securities law and regulations, from taxes standpoint, do either one of them have any US tax liability?

I'm still pretty green to the real estate investment game, so please share some input.

Sorry for being so green about this.