First off - WELCOME TO THE FORUM!
I remember seeing that exact car listed for sale not too long ago (within the last 4 months or so, IIRC). The nose is off of an 85/86 GT Mustang (lower fog light holes), and I think the rear bumper had been changed too. Looks like the side moldings are gone. I'm not 100% sure, but that may be the wrong spotlight (I think all CHP spots were black). Check out the body carefully for prior body work and signs of rust. That being said, it doesn't sound like the car is too far gone not to be saved. The 5-spd swap could be undone if you wanted it back as a 4-speed. Some may complain about the 7.5" rear being swapped out for the 8.8", but that too could be changed back.
That SSP's value will be affected more IMO as to whether or not it can be documented as a CHP Mustang. You should look through the technical data on the main page to learn about how to identify the tell-tale signs of an SSP. The most important item would be the 6-digit DSO number on the driver's door VIN sticker. Having the 2nd buck tag on the radiator would be an added plus (82's had them, right guys?). See if you can locate the car's 4-digit CHP unit number. It would be written above/below that VIN sticker in raised paint pen, which shows up under a repaint unless it was sanded off. Sometimes the CHP would write the Unit Number on the back of the upper rear seat cushion, or on the front license plate bracket.
Once you know the car's CHP Unit Number, then you could try to locate the CHP Assignment Card, which fully documents a CHP Mustang as such (I may be able to help you with that, but only if you learn the Unit Number). You can also search CA DMV records to identify the previous owners. Marti "Eminger Invoices" also help tell a car's history, but those are hit & miss in terms of them finding it.
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I'm posting because I need to hear from more experienced owners whether Im going to be getting into trouble and making a bad investment.
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IMO, you're going to be making a bad investment by buying that car. But the journey of buying, researching, restoring a car like this goes beyond the financial aspect of the purchase. You have to ask yourself what this car would be worth fully restored, and guess as to how much you may end up spending. Speaking realistically, a NICELY restored 82 CHP Mustang will be worth roughly $15-20K in the current market. A project like this can add up very quickly. I have spent more on my CHP Mustang than I could sell it for, and I haven't touched the motor yet. But I didn't buy this car as an investment. It's a fun toy that I enjoy restoring and driving, so it's money well-spent as far as I'm concerned.
The car doesn't sound back for the asking price. Just make sure it is what the seller claims it to be.