I think that $1000 figure is about dead on too. If it's a non-running bike and you have to get into the engine it could be more. I bought a running KZ400 last spring for $400 and have put another $1000 into it to just get it running well with only minor modifications like new bars, smaller turn signals and tail light and bar end mirrors.
Almost every old bike that isn't already being ridden will need a new battery and tires and tubes. Most or all the cables will need replaced: clutch cable, throttle cable(s), tach cable, speedo cable. You'll need a new air filter(s), new oil filter, new plugs - buy several sets because you'll probably foul a few. Fork seals and boots will probably need replaced. You'll need oil, carb cleaner, fork oil or ATF, chain lube, lots of cleaner/degreaser and a lot of rags. You'll need to buy an impact screwdriver, a battery trickle charger, and maybe some other tools if you don't already have them (feeler guages, dial caliper is handy, metric wrences and sockets obviously, and more I can't think of now). You'll probably need a new chain and maybe new sprockets. You'll probably need new grips, may need new brake and clutch levers. You'll probably want to replace the brake pads front and back. You may need to replace a lot of bearings: wheel bearings front and back, swingarm bearings, steering stem bearings. You may need to rewire some things. You may need new headlight or new bulbs for tail light, turn indicators, dash lights. You may need new carb boots and carb holders if they've been sitting for a while and dry rotted. You'll probably need a new gas lid gasket. You may need new shocks which can get expensive depending on what you want.
Couple of things to look for: if it doesn't run does the engine turn over? Make sure it's not frozen. Might not be a deal breaker but could be. How do the header pipes and mufflers look? Replacing mufflers can get expensive depending on what you want. What does the inside of the tank look like? If there is a lot of rust you may be able to remove it or line it or you could end up having to buy a new tank. Are the wheels and spokes in good shape or at least usable? If they're rusty but solid you can always paint them black but if they're really bad you may have to order spokes and re-lace them or find new wheels. Finally, check to see if there is anything obvious missing like any engine covers, pegs, broken shift lever or kick starter, or body panel side covers, chain guard, fenders, etc. None of those things are expensive on their own put they add up. I probably spent an additional $150 in just finding and replacing things that were missing before even getting into any maintenance items. Any of the engine cover bolts have their heads stripped? Those can be a PITA and may cost you money at a local machine shop. Are the spark plug threads okay?
Again, those are all little things and none of them really complicated but they will add up and can take a long time to find, order, and get them put on.
It really comes down to what you want out of owning your bike. If you want something to ride then take the $1500 that you'd sink into getting a cheap bike running and look for something that is already being ridden. If you want to wrench, want a project and know what you're getting yourself into then go ahead and buy a cheap runner that needs some work but realize that you'll probably end up spending as much or more on that than you would have something already in good condition. I really wanted/needed a project more than I needed something to ride and I'm glad I took the path that I did, I've learned a ton (knowing next to nothing about motorcyles prior to this) and had a lot of fun. It's your call, buy a bike to ride or choose the path less traveled