I learned this the hard way, all i can tell you is when looking at a mustang look for these things:
All lights and electrical accessories work as well as A/C, PS, etc.
Make SURE to look underneath the car at the floor for any cracks along the seat bolts and inside the jacking rail and that the fenders line up with the cowl area and there are no irregular bends in the front subframe of the car or anywhere it looks like it's been in an accident.
Take it on a LONG test drive, like 15 minutes until it's nice and hot, this will expose any charging problems, overheating problems, oil leaks, etc.
Make sure to take it through it's paces to make sure there's no detonation, whining, grinding or other abnormalities.
Look around and see what oil he's using in the car. A long test drive will expose a high mileage car with bad bearings and low oil pressure with thick oil because as the engine gets hot the oil pressure will go down dramatically to where you can tell there's a problem.
Also remember: a high mileage car won't just need an engine, also the rear-end is high mileage, brake lines, gunk in fuel tank, wasted bushings, worn suspension components, bad calipers or wheel bearings, and many more surprises may await you.
My personal advice is to get a low mileage car from an older gentleman who basically used it as a nice weather car. You should be able to EASILY get a low mileage stang that's in great condition for $4000. Also make sure you don't fall in love with a car and forget to check it over with a critical eye, this will also get you better deals.
Good luck on your stang purchase tireburner, I know you've been wanting one for a while
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previous name: 84stangLX
'84 Mustang 5.0 LX
my LX
'89 Mustang GT
my GT