Hi Tim,
What car did you have at the picnic? I had the black 1970 911 Targa in the Wash and Shine.
$5k for a 1977 doesn't sound too horrible depending on rust, dents, paint, engine...
It will definitely need a decent amount of work and a few bucks to get in running order. I would say that if the car has 45k original miles, and the engine, body, interior is in good shape then it could be a $10k+ car when all cleaned up. if it has 145k miles, needs body work, paint, interior, engine, etc. then it's more like $3k as it sits.
If you like the looks of the car and are looking for a project, it might be worth picking up for $3-4k or so. Either way, you will have to put money into it and will not make money on the project.
-Dan