Buy or pass? Duplex in KC

[Nic S.]

I'm under contract on a Duplex in a B+ neighborhood in suburbs of KC. This is a buy and hold property. My RE criteria is $200/door + 12% CoC. During the inspection we found significant CapEx items that need to be replaced(Roof,Retaining Wall, Sewer Stack, HVAC, Oven) totaling $29K and I'm being offered three options.

1. Option (1) 
2. Purchase price: $148k
3. Gross rent: $1700
4. ARV: $175k
5. 25% reserves for Vacancy, Maintenance, CapEx, PM + PITI
6. Cash flow: $417/mo 11.94% CoC
7. Seller will replace roof, retaining wall, Sewer stack, and Oven but NOT HVAC - 1st estimate came in at $13K. 

1. Option (2)
2. Purchase price: $161k
3. Gross rent: $1700
4. ARV: $175k
5. 25% reserves for Vacancy, Maintenance, CapEx, PM + PITI
6. Cash flow: $366/mo 9.76% CoC
7. Seller will replace roof, retaining wall, sewer, oven AND HVAC

1. Option (3)
2. Cancel the deal

Option 2 gives me less short term CF but all major CapEx items replaced. I'm currently withholding 8% for CapEx, am I wrong to withhold 5% if all items are brand new? Rents are locked in at $1700 for next 18 months. Anything I am not thinking of? Thanks in advance for your advice and questions....