Originally Posted by
bxboogie
I'm wondering if I will be better off buying the kilo from BD and upgrading when I can.
If you mean buying complete, yes. You'd be hard-pressed to build up anything for $500 -- it would take an awful lot of scouring to get a bike fully outfitted with even middling used components, not just because of your budget, but because of availability for all the parts in the sizes you'll need. There are several complete, entry-level options in your price range, and I'd strongly encourage you to go that route.