I don't lowball, I just politely offer what I want to pay. As long as you don't insult the owner by telling him his car is a broken down parts car IMO you are not lowballing.
If it is original with no intercooler and an oil cooled turbo then it really isn't worth much at all, especially since you have no idea how many miles it really has. Here in the NW maybe $800 or so tops. With the turbo upgraded to watercooled and intercooled the value would run from maybe $1200 and up depending on overall condition.
If you're looking to make it nice it's going to cost plenty of money before you're done. You may be better off paying more for a finished, or mostly finished project that someone already sunk all the bucks into, you never get it back if you do it yourself.
Hard starting when cold could also mean an extremely tired engine.
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Lee 75 244 (80k original miles) 79 242 65 220 project
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