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My assumptions about getting this boat running are: I can buy an engine for $1000. I can get this engine mounted and running for another $200. I can replace the transom for $500. I will need to fix a bunch of other random crap that will probably total another $500. Assuming I do all the work myself...
What do you guys think?
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I don't think you'll find an engine worth having for less than $2K. Unless you can do the transom yourself, it's gonna be a lot more than $500. Just from your basic description, I think you should budget at least $4,000 - $5000 above the purchase price. If one spring on the trailer is busted, both will need to be replaced. Possibly the axle as well. Springs and axle = $275 if you install them yourself. I'm not trying to burst your bubble, just don't want you to go into it blind. There's a reason they say B-O-A-T stands for "break out another thousand". Ryan is right on. You can find a better boat in today's market for what you'll have in this one when you're done.
On the other hand, if you're insane with boat fever, and can't resist the idea of restoring a classic, and money's no object...
Like some of the rest of us around here...
Good luck,
Dave