I've got an 86 XR200, here's my take:
There are two bad bits that jumped out at me when I first rode it. The footpegs are a weak point, carry some extra bolts into the woods with you. The drum brakes are iffy when dry, and non existent when wet. Other than that it has been a blast to play around on.
If it's an old beater bike, the cam has probably worn away at the bearing surface in the head, the cam chain, and sprockets are probably beyond limits. The drums for the brakes are probably beyond spec and won't stop as well as they should.
I got mine in a couple of different boxes for free out of someones garage. That "free" bike got valves, seats, piston/rings, cylinder honed, cam chain, sprockets, tensioners, sliders, clutch plates, all bushings and seals replaced in the front and rear suspension, bearings front and rear wheel hubs, tubes, tires, chain and sprocket, control cables, grips, bars, swing arm bushings and bearings, seat cover, filter. That's what I can remember anyway. I wouldn't be surprised if there were a few more items that needed to be added to the list. It was a project, but I was looking for a project at that time, so it was OK.
If that 500$ gets you a pristine, well cared for bike then it might be a good deal. A better deal IMHO would be to save your pennies and get something a decade or two newer.