I paid $800 for my 94k mile '91 6 months ago, California car with ZERO rust. Yes: the paint on the upper panels is faded and cracked. Yes: the interior was filthy. Yes: it had been sitting for 3 years. However, it fired up immediately and the car drove absolutely perfect.
Since purchase, it's gotten the following:
New OPS
New rear struts
New tires
New starter
Wiring splice repair under seats w/complete interior detail
Serpentine belt
All exterior lightbulbs
There's still work to be done: A/C compressor, block frost plug is leaking, more body work etc. however I STRONGLY believe that I could get $4k for it now. Not that it matters, I'm never selling. In fact, I'm hunting for a cheap parts car I can hide in the backyard.