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I can make out 4156 on the tag – they’re great little motors – poppet valve carbs, very simple, typical ignition for the period (read: expect to replace), an exhaust note you’re only gonna find with an opposed twin. On the downside, their waterpumps are a pain in the ass – checkballs that tend to stick and are difficult to access.
On that motor, I’d want to make sure the skeg is still there (they rank up there on the fragility scale with Bendix). And I’d want to be darn sure that crud on the left cylinder – at the back, toward the bottom – isn’t a burst water jacket.
As for the price – ask him to start it for you. If it starts, pay him and be happy that it has good coils. If it doesn’t, try to get him down on price.
added: I just blew up the pics, and that sure looks like a burst water jacket – not an insolvable problem, but it makes a motor that should bring $100 at best worth more like $40 as a parts motor/major project