So I am back with some updates on my quest for a bike. Based on everyone's persistent suggestions, I decided on getting a GS500e after all. Other bikes that I had in mind had to be dropped because of one problem or the other.
The next step was to find a place to get the bike from. I talked to several mechanics and eventually finalized Mr. Naeem Khan (Mithoo) in Iqbal town who is a Dirt Bike enthusiast and also enjoys restoring other bikes.
After having some discussions with Mr Naeem and the very helpful Fahad bhai (Gorkan @ PW), I realized three things:
1. Getting a bike restored is awesome because you can have your own customization in design and you know each and every part of the bike. However your cannot be too optimistic as there will be some compromises.
2. Getting a bike restored is an indefinite process. It can take several months and the delays are caused by people and processes you cannot control. (this was a problem for me because I do not have that kind of patience)
3. Getting a bike restored is an expensive process. I got an estimate for at least 280k for a decent restoration. (and I don't have that kind of money. After stretching my pockets as much as possible, I came up with 240k, after that I would not even have money for petrol :p)
Based on the above three observations, I had to give up the idea of a restoration. I have now been looking for a ready-to-ride bike. However the bikes I've seen for 220-230k need some work. And the ones in immaculate condition, like the super awesome Black Pearl owned by Talal Bhai (@7thgear) are available for over 300k.
So the moral of the story is, I have not given up. I'm still hopeful that there is a bike out there for me and I will find it soon. Please wish me luck and once again many thanks for your advice and suggestions. I'll post an update soon for the benefit of other newbies who might be looking for their first 500cc!