$500 is waaaay too much money for a basket case like that. $150 MAX, IMO. Putting that bike together would be a challenge for a good mechanic with lots of experience. As a first project, I would predict that you would get frustrated and give up long before you got the bike running.
I recently bought an '80 Yamaha XS650 Special for $400. The bike was complete and assembled. I put gas in the tank, jumped it and it started! All it really needs is carburetor cleaning, and general cleaning and polishing to be a running, rideable bike.
I think you need to keep looking. There are much better deals out there.