When I first got into cycling, I spent $200-$300 turning a so-so Scott mtn. bike into a "road" bike. Within 6 months, I wanted an actual road bike.

I'd buy a new bike, the one you want, and not put money into an old bike to try to get it to fit your needs. I'm not anti-old or fixing up bikes, I just don't think it's a good idea to try and make a bike into a different type of bike. Good luck!