[240 2NR]

First a correction, it's actually going to be $1578.  Don't forget about an FSM.

Well if he has a lot of experience with turbo systems and access to lots of parts, and most importantly is good at tuning a system, then it might not be a bad deal. However I would keep two things in mind:

There is a balance among three key compenents.  Cost, power, and reliabilty.  Going cheap is going to sacrifice the other two.  As the level of investment increases so do the quality of parts and system.  Remember, junkyard parts are there for a reason, and you get what you pay for.

Second, even if you can keep to your $1500 goal (I'd say $2500 is at least what it will amount to if you plan for $1500, it always is), it is only the start of your costs.  You'll really find that upgrading your clutch is a must, then as the engine is stonger, your suspension will feel overwhelmed, then you can carry more speed once that's improved, so you need to scrub it faster and now the brakes will need improving, etc.  Plus all the trouble shhoting and related things that need replacing/ repair due to age and additional stress to the engine.  

Read up and make your choice.  None of us know your friend or the work he does so it will be left to your judgement.  I don't want to sound like I'm telling you not to do it, just want to make sure you understand what's involved.  Best of luck.