If you knew what you were looking at, I'd say go for it. My first used rigs I bought were disasters. Stripped screws, motors that barely ran once up to temps. After mucho learning the hard way, now when I buy used, I have a good idea of exactly what I am getting into.
The big ifs are how the motor was broken in, treated, and how much fuel has gone thru it. I have seen some engines last forever, and have personally killed a couple after a gallon of fuel. Having a temp gun does not mean the motor was not abused. I had a temp gun when I wore my 1 gallon motors out because of tuning issues, and extended full speed running down the street. Take your finger and see how difficult it is to get the piston to move after it builds some compression. If it moves easily, the motor could be worn down, and could stand to have the piston and sleave pinched, or replaced. if its difficult, Id rekon a guess that it has life left in it. One thing that can mislead you in regards to the overall condition of the motor, is built up residue the fuel leaves. It will make the motor more difficult to turn over, and will make the motor seem like it has more compression than it actually does. WD40 sprayed down the glowplug hole, and carburetor inlet will help free up the goo, and allow the motor to spin more freely if it was gooed up. Spin the motor upside down to get the excess WD40 out and check for compression again. If you can take the motor out, a rule of thumb is to hold it 90* to the side, and see how long it will take for it to rotate past the pinch at top dead center. If it holds for 10 seconds, you're good to go. If it takes less than that, the motor isn't necessarily bad, it might still run great, but it does not have full life in it anymore.
As far as the chassis is concerend, the big things to watch for are broken/cracked parts, junk stripped out screws, and dirt. Broken screws bring the suck. If and when you buy, avoid crashing it right off the bat, spending 5 minutes to crash it will net you 2-3 hours of repair time.
Id try for 1/3-1/2 of retail on whatever you are buying, unless its in brand new condition. My rule of thumb as far as pricing goes is this. Brand new stuff that is not being sold by a store is worth 75-90% of what the store sells it for. Used in excellent condition is 50-75%, used 50% or less. If you add $200 worth up upgraded parts to a $300 car, it does not make the car worth $500. Once that $200 gets added on, it adds only $50 or so of value, so keep that in mind. Before you buy, look at completed listings on ebay. This will give you a ballpark of what things are going for, so you dont pay too much.