justinwb, if you do a search on "build", I'm sure you'll find this question answered in great detail within the last 30 days. The cheapest way to go, if you don't have any of the tools commonly used to build ARs, would be to buy a complete lower for $225 or so, and a complete RRA upper for $370ish. This keeps you within your budget, and all you have to do is put the two halves together, push in the 2 pins, and go shooting.
If you DO want to build, you still want to get a kit with a full upper; you don't really want to have to build the upper, since you'd have to put the barrel on, which, if done by the book, requires a torque wrench, and an amorer's wrench...the cost of those items, if you don't already have them, will bust your budget. You can get kits from Model 1, M&A, or J&T from between $400 and $500, depending on options. You'll need a lower parts kit IF you don't buy a full kit; you'll also need the buffer/tube and buttstock assembly IF you don't buy the full kit.
If you want a standard A2 lower, it's really cheaper just to buy it, depending on what your local FFL charges for transfers. Depending on where you are, you *may* be able to get full lowers at local gun shows, that way you wont have to pay the FFL.
Here are typical prices:
stripped lower $100-130 plus FFL
lower parts kit: $55
buttstock/buffer assmbly $60
see, you really don't save any money by building the lower; I don't know what the advantages are to doing that other than being able to get the components individually over a period of time, so that you don't have to part with the $$$ all at once. A Mega lower is $89 shipped, but that pesky FFL will add at least $20 to that, unless you can get it in person.
Most kits come with the upper assembled, and you just have to build the lower. I just put together a lower minus the buffer tube with a brass hammer and a plastic punch, but I might have gotten lucky. Typically, you'll need roll pin punches and roll pin starter punches. Oh, do yourself a favor and at least order the front pivot pin detent tool...it'll save you lots of trouble hehehe.
Buying a full kit and a stripped lower is the least expensive route; the cheapest Model 1 kit is $400 plus shipping, and a stripped lower is as low as $89 plus shipping and FFL, so your total out of pocket is less than $550 for that, assuming you don't need $40 worth of tools to put it together. The same kit from J&T is about $50 more, but their quality is reportedly better than the Model 1 stuff.
Or, you could just call Atlantic Arms...the have various versions of ARs using CAV Arms lowers and DPMS uppers on sale for $599.
Well, that should get you started...good luck, and once you get your first one, you may as well kiss ALL your spare $$ goodbye lol. In 6 months, you'll know EXACTLY what I'm taling about [:D]