I would go for it.
My older brother and I cafe'd a CB550-four. It was over your pricepoint...but you aren't starting from a non-modded standard and didn't buy another motor. You might have to get a little creative in regards to parts...I would look into what is available at boneyards and parts interchangeability between bikes. We took ours down to the frame, gusseted/reinforced it powdercoated/paint...etc etc etc. What specific parts are you worried about sourcing? I would start a list. What exhaust? Suspension? Putting pods on it? What are your main concerns? Brackets? Headlight? Seals? Bearings? Does it run? Carbs wonky? Have the tools you need? Where there is a will there is a way.