I'm kinda bias, but I would boost a cheap honda. Find a cheap EF hatch or CRX. Perform the need maintance on it. Find a cheap z6 and rebuild it with tuner toy rods ($250) and vitara pistons ($80), then boosted. With the proper setup, you can easily make 300hp+. 300hp in a car around 2000-2200lbs is more than enough to run with some 400-500hp cars. If you look the right places you may be able to achieve that within your price range