2 family deal with a fair amount of work needed, thoughts?

[Kyle Eckert]

We have been working on a deal in my neighborhood for a while and we cannot come to an agreement, so any feedback would be appreciated:

2 family house built in 1904, 2/1 on bottom and 1/1 on top.  Should easily rent for $1400 total in my neighbrohood.  The units look pretty standard, they could use some polishing and whatnot.  The big issue is the systems.  

-The water heaters, and AC units are both 20+ years old; the furnaces are a bit newer but not by much. 

-The electrical panel is a disaster, we will replace immediately.

-Roof is good (flat-top), siding needs some attention.

-Sewer main in crushed.  

Originally listed for $137k. We initially agreed on $129k with some closing costs covered. After the house and sewer inspection we adjusted our offer to $115K and they fix the sewer.  He says $119k and we fix the sewer.  This is where we are stuck.  The sewer is old terracotta and runs under the neighbors driveway.  There is no way to know the extent of the sewer issues, as the scope could only go a small distance into the pipe.

For a comparison , a nicer 2-family on the same street went for $144K, but it had garages and appeared maintained.

Thoughts?  Thanks in advance.