No, it is not too cheap. It could be a good deal for you if everything checks out OK maintenance-wise. Being a neighbor is a HUGE plus because he most likely will not try to screw you over. If you feel comfortable with everything, go for it. Even putting a few grand into it won't hurt you financially if you keep the car a few years. Just make sure the car doesn't need too many things. It can add up in a hurry just with tires, brakes, a new stereo, etc... If you feel it needs body work or paint in the near future, you better factor all that in. Good luck!
2001 Trans Am Convertible Red w/ taupe top (A4)
2007 Ford Mustang GT/CS Convertible White w/ black top (5 speed)
1974 AMC Matador X Red (3 speed auto)