At first glance it needs new carpet through out and some patch work in the flooring.

A year as a roofer, and a couple years working the oil patch in Alberta (GET ER DONE!!!!)

Just patch issues that come up and disrupt as little as you can.

If you decide to do a patch job and plan to own the home long term it's likely at some point you will be facing this problem again.

The kitchen has only bare walls (no appliances, cabinets, countertops), certain sections of the roof have been patched with felt paper instead of shingles (most likely the whole needs to be replaced), basement has limestone walls and is moist (I believe that water is leaking into it).

There was one large, obvious patch in the ceiling that was ugly as sin.The outside of the home was OK.

(needs a lot of floor work, re-carpet half of teh home, then kitchen need re-vinyled after we patch those holes, and we have to frame out a wall because he turned his 2/1 in to a 1/1!).

If you notice a significant number of houses that have aged or patched roofs, need painting/maintenance, more cars than parking spaces, cars that obviously aren't running, lots of weekday activity/presence of school/working aged males during school/work hours, low rent rates and recent sale prices are all indicators of decline.  

As for patching, IMHO, any normal to large nail will require the same amount of time and material to patch.

You can cheat yourself by patching the roof instead of replacing it, installing a new kitchen, but not the plumbing, to save on expenses, but you are only taking money from your future self.