Originally Posted by irclean

There are bikes out there on Craiglist; like this one. If you want to mount a rack you might be better off finding a used
MTB and converting it to road use with drop bars, etc. As for a backpack/pannier solution I personally love the Arkel Bug.
It's pricey, in fact it costs more than you're budgeting for a bike, but you could get many year's use out of it IMHO.