Based on prices in this area it's a little on the high side, but if you're planning on buying one that's stock for $5k (which is pretty typical at that mileage) and then doing similar upgrades you're going to be into it for more money than he's asking pretty quickly. You can easily spend $1k on tires alone. Then another $3-400 on a new receiver, and you're probably going to want to do the shocks if they haven't been done already.
I'd want to know about the timing belt first thing, and get a look at the rear axle seals. Assuming those are ok if you can pick that up around $6k I don't think you'd be doing too bad.
As mentioned above, it's getting harder and harder to find these things under 200k miles.