+1 to eternal’s comments.
For my own:
You said that you only have $800-1200 to spend. MSF class aside, you should also figure in another $250-500 for safety gear and $100-800 for insurance depending on how risky your insurance company thinks you are.
If you are running with guys who think high displacement sport bike are cool, you’re going to have to go with the high end on both, so gear and insurance have just eaten up what you want to spend on your bike.
The smart thing to do (and what it sounds like you actually don’t mind doing) is to go with a smaller bike (like a 250 Ninja). It will radically reduce your insurance cost, and if you watch Craig’s List like a hawk, you might find one that will work. However – DON’T BUY SAFETY GEAR USED!!!
Mostly it sounds like you are only interested in this bike for its price and provenance. Skip it and find one that you like for learning on.