I'm gonna go against the grain a little. If the engine really is new it alone makes the car worth 1500. So, it is actually a decent price. The problem is that unless he really can prove that it's new (like it was purchased in the last month or so), then there's no way to know for sure.
Others would know better than me, but I'd guess that it would cost you a grand or so to put an interior in that car. 2-3k for a nice paint job, and $2k on nice wheels and tires, and you've got a pretty nice car. That's going to take you a long time. At which point, you'll have about $8000 (1500 purchase, 2-3k paint, 1k interior, $2k wheels tires, 500-1k miscellaneous), invested into a really nice looking/driving street car that *might* be worth it. Then again, depending on the quality of the work, it might not.
My thoughts are that if your intent is to do what I just said, then save yourself the hassle and spend the money on a car of that quality now. A car with a running drivetrain, really nice paint, and a clean interior can be had for $5-6k. A driver with crap paint, and a moderate interior but some mechanical/cosmetic defects can be had for $2k-2500.