Flipping a house with termite damage

[Joe Horan]

Hi everyone. 

I've got a house in Indianapolis that I'm currently under contract for that I was planning on flipping. The details are below: 

Conservative ARV - $125,000

Rehab Costs - $60,000 with GC

Purchase price - $16,500

On paper, this looks like a deal but the inspection returned evidence of wood destroying insects with some of the joists in the crawlspace. The joints are structurally compromised but it would pop on an inspection with a buyer. 

My question here is how much more risky do termites make the deal? How difficult would it be to sell once the flip is complete? Should I renegotiate to give me more wiggle room?