The bike is an 81SH. Probably built in the second half of 80 as per the model manufacturing time frame. Aug of one year to July the next
Positives.
Title; A titled neck or frame is going to cost $250-$300
Bike runs; According to owner and although it does have some problems it can be used as is and learn about the XS.
Good condition; Parts will fetch good money to go towards the cost of the build. Reduces the initial cost.
TCI; If the bike runs then the ignition is still good. Save money on getting a new one till the old breaks down. A lot of guys are still running the factory TCI ignition.
Mag Drum brake; The only year the XS650 come out with a Mag wheel with a drum brake in the States. These are rare and worth money, also changing to a spoke wheel is a straight bolt on change over, no frame mods needed.
Possibilities; Charging system may still be ok so a saving there. Factory charging system in working condition works well and anyone who says the XS650 Charging system is shit and has to be upgraded to a more reliable PMA doesn't know what they are talking about.
Negative:
Engine needs work; If it is only a Valve stem seal, (have my dough-ts), then the bike can be ridden as is while you get all the parts together for a build and gives you an opportunity to learn about your carbs, timing, ignition, charging and such. The compression no's aren't real good, and i would check them out, but even with those no's the bike will perform well enough