IMHO whether to buy new or upgrade is a very personal matter with no right or wrong answer but I think the frame is the most important part of the bike. If you like the frame then have at it and upgrade. I can't think of any folding bike out there that is perfect and wouldn't need some sort of modification to suit me, so to start off with an inexpensive but solid frame/bike and upgrading it is the way to go for me.

I've often heard people make remarks about how silly it is to put $600 worth of upgrades into a $200 bike. The fact is if it suits the rider better than any $1000 bike, then it was a smart move.