HELP- Should I buy this or not?

I just got back from looking at a 1977 gold trans am with a 400 and 4-speed. It was listed for 2500. Upon looking at it in person, Numerous problems arose. In a lot of places it looks like the clear coat is peeling. The trunk pan is rusted on the edges, and would most likely need to be replaced. The whole drivers side quarter pannel is shot, but is only asthetic. The passenger side rear wheel wells are rotted some. The floor pans looked good. On the passenger side, about a foot long section of the frame apeared to be rotted. The passenger side wheel cylinder leaked. The sides of the hood looked rusty. The passenger door needed to be lifted up a little bit to be closed properly.
When we drove it, the steering was tight, and it was ok. But the brakes were spongy because of the bad wheel cylinder.
The thing that I was worried about however was the lifter made a noise when started cold. The owner hinted that that was common among old trans ams, and he said it went away once it warmed up. Is this a problem? Would I need to replace it? Is it a sign that the engine is about to go? It has 86,000 miles on the clock.

I am 16, I am not a mechanic. I can learn quickly and my dad has some knowlege, and we don't have loads of time on our hands. Would we be getting in over our heads, or do you think that we could manage and get it in shape over the winter?  

A clacking lifter on cold start does NOT mean the engine is about to go.  What is the oil pressure when engine is hot and at idle in gear?  It should be 15psi+ on a reasonably healthy engine.  

The clacking lifter could arise from several causes.  

One is that a previous owner did not adjust the rocker arm nuts correctly.  If the valve train is stock, torque the nuts down to 25lb-ft.  If the previous owner was a Chebbie guy, then this cause is very likely.

Another possible cause is a dirty or stuck lifter. Driving it for a while might fix this.  Also try changing oil and filter.

Another cause is a wiped cam lobe.  This last one is a the most severe.  But even that does not mean that the engine is about to go, only that a new cam and lifters are needed.  You CANNOT change just one lifter if it is "bad", because that alone will probably wipe out a cam lobe.  If you really knew what you were doing, you could take that lifter apart and fix the offending internals of that single lifter, but I would not recommend that procedure for an amateur.

Keep us informed.

Craig  

The other concern is the condition of the body, can you and your Dad do the necessary work or will you have to pay to have it done? $2500 is a fair chunk of change for a car if it needs major body work, even though it is a fairly desireable combo. Just be careful what you are buying, you don't want your first Pontiac experience to be a bad one, or your last.
Steve  
Trying to help... 'cause we don't all have to learn the hard way!

A foot long section of frame rotted? Rotted? Or just rusty? As in: not clean and painted looking? Or does it look like crushed graham crackers? A little rust can be fixed but the hidden rust you don't see until you start pulling off fenders and cutting out trunk pans that'll open a can of worms.  

it was rusty. I'm not sure how bad, but it wasn't cracked or split.
To fix it, can't a mechanic cut out the rust and weld a new piece in place?
About how much would that cost?  

Clean the rusted parts up first with a powered wire brush or other suitable tool.  If you can see through it, then it's gonzo.  If it is only surface rust, spray some rust reformer on it and paint it chassis black.  

If you don't feel qualified to make that call, hire or borrow someone who does restorations for an independent opinion.  "We" on this board would have to be there in person to make that call.  

A little surface rust is normal and ok, as stated before. It can be cleaned up easily. If it's rusted through or even nearly through(enough to comprimise the integrity of the frame) I would pass on the car. It would be a shame that such a desirable car was so far gone.  

I was told of a 1979 that is supposed to have approx. 50,000 orig. miles, clean inside and out for $3500.00.  P.M. me if you are interested and I will get the details.  I have not seen it and was thinking of buying it to add to my collection, but would be happy to pass it on to a young person that is begining to get the car fever/addiction.