As long as the body is straight, you can't beat a deal like that. Do you know if the car runs? If so, you've got the foundation to build a fast car, and for $500, that's a great deal.
I'm keeping my eyes open for something similar for my next project. I don't care if the engine is locked up and the tranny is blown, as long as the body is straight and free of structural rust and they want $500 or less, I'm gonna pick it up. My plan is to strip it down...all the way down...and build up a 393 with a large single turbo to have fun with on the weekends. If I can't find what I'm looking for, I might consider dropping it my GT since the car is in great shape and the interior is perfect. If I go that way, I'll leave the car as streetable as possible with full interior and A/C and run through some quiet mufflers to get a pseudo sleeper effect...if that is possible with a 600+ horsepower motor

. Of course, I'll have to have a cage....
I'd say go for it. You're on no time limit...you have no special rush. And you've started on the right foot by coming to this board. You can find tons of information here, and the rest you can pick up at your local bookstore. Take your time, have fun with it, and learn as you go. What have you got to lose?
--nathan
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'91 GT, Coast 347, 9.5:1 compression, full intake, Wolverine 1087 cam, exhaust, Keith Craft ported Windsor Jr. Irons (235 cfm intake, 195 cfm exhaust), AOD, PI 3500 converter, Lentech valve body, 3.73's (4.10's in the works), and Yokohama ES100's out back.
Daily Car: '04 Infiniti G35 Sedan 6MT