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what the engine bay looks like or exactly what is meant by "more rust than I thought". Personally, I'd be wary of a significant amount of rust under the hood, but then again, depending on the severity, you'd have an opportunity to clean it up with your plans of doing a swap. As with everything, it comes down to time & effort. I wanted a TT, so I took my time trying to find one. I didn't have the time or desire to do the work to swap one provided I could find a TT that hadn't had the piss beat out of it, which seems to be the majority that you'll see on CL. FYI, it took several months of looking and I had to fly to go get the car - mostly stock, single owner w/ 116k. Maybe you can save some money if you do the swap yourself, but you'll have to talk to guys that have experience with that... and who can also provide more insight on actually doing the work. Sourcing parts is an adventure all its own, also. Again, it's hard to give you good advice without knowing the condition of the car, but ultimately, it depends on the level of work/pain you're willing to endure. All that being said, I'm biased toward starting with a TT that's in decent shape. Recommend checking out as many "what to look for" videos/articles as you can - you can learn to identify red flags which may provide negotiating leverage or just tell you to walk away. Whichever you choose, best of luck!
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