I have a Smithy Granite machine that I was able to pick up very reasonably. It came with a ton of tooling and even a bunch of raw material so it was hard to walk away from. It has been a good little machine and I've made a lot of small parts with it and used it to clean up parts, surfacing, boring, and reaming on parts I've been making. It is a pain to do accurate work with, but can be made as accurate as you are able to manipulate it. And forget about threading on it. Changing gears every time you need to thread isn't my idea of a good time. However, it has been an extremely useful machine for small, quick items and doesn't take up much space.
However, these guys are absolutely correct in that the capacity just isn't there for any really meaningful work. Rigidity is not there either so you need to be very careful about fixturing work. In other words, it is fine as a secondary machine for quick, non exact jobs where extreme accuracy isn't important- and we all know there are lots of those around the shop.
I invested in a used older Sheldon Lathe which has turned out to be a very good machine, but, being old it needs some TLC and I will need to do a bit of work on it soon. I also bought a used old Tree Mill, which is a monster- which I haven't set up yet. Waiting for our new house to be built so I have a bigger shop to install it in.
While looking for machines, especially lathes I recommend a couple things -
Be sure to buy a lathe with quick change threading. Some of the older lathes that will fit into your budget may not have this feature, so be sure to look for it and test it a bit before buying. Make sure the tumbler handles and box work smoothly and there is no vibration or jumping around of the tumbler handles while under load, if possible. If possible, check to see how much run out the chuck has and what chucks the seller is offering with it. A good 3 jaw chuck is mandatory, but if a 4 jaw is available jump on it. Depending on what type of work you are planning on doing you will need quick change tool holders. If the machine you look at has the lantern or four post tool holders, they will work for a while, but you will want to start shopping for QCTP (quick change tool post) and tool holders to start with. A couple different live centers, a drill chuck with at least 1/2" capacity, and a boring head will be needed fairly soon if you're serious about getting any real use out of the machines. All will need the proper taper tang shaft to fit the tail shaft.
If you're going to be doing through-the-head work, like barrel or axle turning, you will need a spindle bore large enough to handle your blanks. Most of these type of lathes have a 1 3/8" spindle bore (or slightly larger).
As far as the mill- try to find a Bridgeport or a Bridgeport clone- there are tons of them and most of the parts are interchangable (but not all). Prices are all over the board so get the best deal you can if the machine is solid and not completely worn out. Tooling will also be important but the most important thing with the mill is to get a good, heavy duty vise like a Kurz and some good set up jigs, T-nuts that fit the table on the mill, and bolt down fixtures and pieces. A DRO is helpful, but not necessary immediately.
All in all, I'm thinking you're going to need to double your budget unless you get really lucky. And consider widening your search to several states away. Prices and availability jump substantially depending on where the machines are located. It will be worth it to be willing to drive several hundred miles each way to get a machine that is price right and the owner/seller is willing to help you load- hopefully with a fork lift.
Good luck in your search.
Bob