well you kinda have to be the judge of how much work it needs. first off, the fact that its leaking oil immediately means new gaskets for the engine. Take a look at all the parts (right down to the frame) and try to figure out what needs to be replaced to get it 100% road reliable. the more you find wrong wiht the bike, the better bargaining leverage you have...
Honestly, if the engine leaks oil, thats kinda a headache, I wouldn't pay 1000 bucks for a bike with that small of a displacement.. thats like 7-10 bucks a CC!
remember, you don't have to buy the first bike you come along, and just cuz its a smaller bike, doesn't mean it will be a smaller scale project (not sure exactly if thats what you meant by "small cafe project).
If you aren't 100% sure about the purchase, I wouldn't take it
Well thats my two cents anyways...