Obviously, I could spend a couple of grand and replace the carpet and pad which would get rid of the problem unless it is in the sub flooring, but I don't want to spend the money unnecessarily.  

The following is a partial list of things that wear out or become outdated over time and eventually need to be replaced for every property:-Roof-Siding-Hot water tank-Furnace-A/C system-Electrical system-Plumbing system (inside)-Sewer service line-Water service line-Any concrete exposed to the elements (sidewalks/porches)-WindowsIf you calculate the cost of replacing each of those items and divide them by the expected useful life, then sum that up, you'll come up with a monthly amount that you can expect to spend on capex over the long term.

There aren't many updates that need to be done to make it tenant ready; a couple door replacements, small bathroom fixes, and cleaning out tell unfinished basement which the owner started to make into other apartment but ran out of money.

Sell the entire portfolio and replace it with a lesser number of units whose value is the same or greater than that which you sold.  

I've done lots of research, and read books, but I know that nothing can replace experience which I'm lacking in.  

I'm software engineer working a 9-5 job.I have zero knowledge about real estate, but I'm very interested.

You might get at least an idea on how much life the roof has left in it, and how old your water heater is, HVAc, heating system, etc and figure out a number to set aside for replacing those someday. 

There might be re-grading that has to be done on the exterior and digging out the outside and sealing as well as the inside.If the weeping system is broken or outdated it would need replacing.

I'm currently a sophomore in college at Ohio State studying structural engineering while doing some brokerage on the side with Crawford Hoying and I'd like to get a duplex to rent out this summer to get some passive income going.  

That was helpful but I believe I need to report the remodeling costs now not when I sell as advised by Matt.We have a continuing discussion about this and I believe the rules for 2014 changed as well, so you really need to seek proper advice.However, the discussion we've had goes along the lines of whether we made a repair or replaced something, as to whether we can take the deduction.