I'd say the limit is what you are willing to put of yourself time, effort and $. Me, I came to the conclusion the only way I could have another sail boat was find one I could get into cheaply and invest sweat equity. I needed a boat I could get some use out of as I invested in time / material to upgrade those areas that needed it. I also have the space on my little farm to work on her. I just finished the keel over the past winter and will put her back in the lake for the summer months.
Only you can decided, if you explain more about what you think the boat needs then maybe the guys on this forum can help you determine what will be required to fix it. That will give you a better idea of which way to go. Keep & fix, sell as is & try to recoup, or get a lawyer and sue the seller for fraud are the only options I can think of without knowing more about the problem.
James