That's pretty sound advice above ^ by XRQTR, I would have to agree with most of it. The seller is always going to say positive things about the car, but my advice is that this car probably needs lots of work. On the outside it looks cleanish, but that's only because of the wheels, take them away (which are probably on spacers anyway!) and you have a fairly average 2+2. The paint look ok, on the outside, but RED always looks good!
As stated, go view the car. It will probably be a lot rougher in person. There is always hidden stuff and the interior looks like its shot to s%^* to be honest.
I would be more interested in this car, I know the colour is not that great. However I think the colour can grow on you. The more I see these vintage colours the more I like them.
http://cgi.ebay.com.au/1976-Datsun-260z-2-2-matching-chassis-engine-number_W0QQitemZ330304131857QQcmdZViewItemQQptZAU_Cars?hash=item330304131857&_trksid=p3286.c0.m14&_trkparms=66%3A2|65%3A1|39%3A1|240%3A1318
Item number: 330304131857
It is in Sydney though, I would honestly keep the $5k you have saved and keep saving till you get to $10K and buy a super clean original Zcar. You will be glad you did. Paying a little more for a cleaner car always costs you less in the long run.
Then again I could be wrong, that red car could be in good condition on closer inspection. Go take a look and if not sure what to look for, get an RACV inspection. If the guy selling the car honestly thinks it won't need much for a RWC ask to be able to have it inspected by the RACV. If he has nothing to hide, he won't mind will he?