Originally posted by 1K3
This question is too hard!
that's why there's a car company called...Bayerische Motor Werken:D
Indeed. But for $7K, you'll probably have to pick one or the other.

I can tell you this--better to start with fun-to-drive, and later build up the engine to make it fast. It is easier IMO to make a car faster, than to make it handle better. Handling is a function of the chassis and weight, and you can't really change those much. But you can do a lot of stuff to an engine to make it more powerful.
I'd suggest test driving an old Toyota MR2 or Porsche 911. The MR2 is a Lotus design, they basically designed it and handed the blueprints to Toyota. You'll be amazed how fun these cars are to drive...at a subliminal level. It ain't just about the numbers. Since you live in the desert, I'm sure you can find something in good condition either in Vegas or SoCal.
Of the two I'd recommend the MR2 just because it's more reliable and parts will be cheaper. Plus it is cheaper to start with. You can find a good condition 85-89 Mk1 MR2 for about 1500-2000. Then take it to a shop to rebuild the engine (about $1500), just so you have a clean start. It won't be unbelievably fast, but it will be extremely fun to drive. And you have $3500 left over...after saving up a little more, you can build up the engine to 250-350 HP...in a light car like that, you'll beat just about anyone off the line.