I think your biggest factor is time, not your money. You can by the $800 car and have a hell of a time, or a bitch of a time all due to time constraints. If time is no problem and you have tons of it, you will inevitably get more satisfaction from the $800 car.
If you have a weekend here and there, but no specific and guaranteed time, buy someones 75-80% done fox with a H/C/I on it already, but needs suspension and brakes or something. Those go for 4-7k all the time.
Don't listen to Shoalin Douche, as his answer to everything, even his viagra shortage is a vette.

Buying instead of building is the EXACT OPPOSITE of the question you posed in the OP.