Well here´s the thing. If the bike is having mechanical problems, and you have the know-how to fix it yourself, than go for it. $500 is not too bad for a bike that runs, but not well. Problem is if you have to take it to a shop to have the work done, you will spend more than what you would have just buying an already running starter bike. I paid $1000 for mine and all it needed was an oil change and a little tune up. I did both myself and I´m very happy with it. Just see what it needs and you will be able to tell if it is something you can fix by just purchasing replacement parts, or if it will require a large investment to get running again.
Judgement call...but sometimes what seems to be a good deal can quickly turn into a money pit.