As someone who listens to BP faithfully, this under-the-rug treatment is a little concerning. 

In order to bring my unit up to almost the same shape, it will cost about $25k (update kitchen & appliances; flooring, update bathrooms, dual pane windows, scrape ceilings, paint, etc.)Is it worth $25k investment to upgrade the condominium and then sell (based on the value of the unit in escrow); or should I do the basics (new paint, rugs) and then sell (based on the appraised value)?  

They told me everything looked great and then pulled the rug from under my feet.

Property is worth about 110-125Can pick up for around 80-90Fixing cost under 10kValue should be around 150-160k when completed going by houses around the area/similar layout within 1/2 mile.The property is family involved and the owner can no longer live there so I can purchase for well below actual value.Needs minimal work but overall very good shape AND everything is up to date: gas/electric/inspection, etc...Very easy flip with cosmetics/paint and maybe a rug/floor in rooms if decided (not necessary)If you're interested and have the money available definitely let me know and we can get started together.

Also the motivation will be different based on the tenant base and expected rents and what finishes they expect for the area,how long you hold the property for,if you are an accidental landlord where you have to rent out by necessity,or you actually purchased this property as a rental in the beginning.Many factors will play into what decision you make.What you can also do is refinish the wood floors and then buy a big area rug for cheap to throw down for the high traffic area and only the corners would be exposed.

Option B I would have to make some repairs to the unit once they moved out i,e rugs, paint, miscellaneous repairs but I am confident I can get $1450-1500 for rent. 

The area rugs we have to help reduce damage do not do the wood floors justice.Hope that helps :).

There are hundreds of other ways Sellers can try to sweep problems under the rug.

Since it's such a small area, why not buy an area rug to place over the commercial carpet?

Once the rug is pulled goodbye.