This is exactly what I did. Payed under a grand for the car, insurance was around £1400 for the first year that I drove, 2nd year went down to £1100, 2 years and a few thousand pounds later its got a rebuilt rs turbo engine in which goes like fuccccccccccckkkkkkkk! .. only problem is now I cant afford to insure it because I've spent all my monies on it lol

*edit* have a look at my resto thread if your serious about going for a bonus.. it will give you a few ideas of what to expect along the way .. not going to lie it was all worth it in the end though!