engine question/need advice

The engine would probably be OK, given it's never been cranked and just sitting, as long as its been stored in a dry place with the exhaust/intake covered up. As far as the tranny goes.....thats a tough one, if it's been sitting for 5 years I would be afraid that once it pressured up and started to run those clutches would fall to pieces (but might be just fine). I guess it depends on how good of a deal you are getting!

on the engine I would make a contingency plan with your buddy stating that if the engine doesn't have certain pressure in all the cylinders you can return it, or get some money back, or he fixes it for you, something along those lines, preferably in writing

was there any oil in that thing at all as it sat for 5 years I doubt it, it was just probably coated with something, there was probably no carb on it either, so I would be concerned about the intake / exhaust valves on the cylinder that were opened depending on what stroke / firing order it was on, the rings and cylinder walls may have had some sort of moisture / condensation on them, you may wanna find out by taking the spark plugs out and feeling for the piston, then when you test for pressure those may be the runts of the litter

just trying to help, hope all turns out though

I would remove the valve springs and have them checked. Also I would check the cylinders for any rust from sitting. Make sure you prime the engine using the oil pump shaft before you start it up. You should be fine with that engine.