I actually have a bit of specific experience with this, having bought a Yamaha Pacific from someone at school a while back, for a mere £20. I reasoned at the time that this was great, and even if there was something that rendered it unplayable, it would still be worth the money for parts if nothing else. Indeed, i turned out that the £20 was slightly too good to be true, and it turns out that there was a huge split where the neck meets the headstock, meaning it was unplayable.
So from this, there are a few things too look out for when buying a very cheap 2nd hand guitar;
- Check the woodwork and make sure it is complete, without any signs of major damage repair.
- Make sure the neck is straight and the truss rod is accessible. Also make sure the neck is firmly attached to the body.
- Test pickups and controls to make sure they work, and that they are not just plain dead or buzz so badly the guitar is unusable. Also, loud noises whenever you adjust the controls is a bad sign.
- Make sure the frets are intact, and that there is no fret buzz. Make sure the saddle and bridge is able to be adjusted, and not rusted in place or something.
If everything seems intact, then go for it! Remember, when you buy a second hand guitar, you can always change the strings and set it up the way you like it, so don't be put off by how it feels in the shop. Pacifics are good guitars, so go for it if you can.
Incidentally I repaired my Pacific's neck with a load of glue, and now I keep it as my 'weird tunings' guitar when I need to add some body to my recordings.
Hope this helps!