check out specialstage.com or rallyclassifieds.com
you will find caged, battle-tested rally cars for $5000 or so, often with piles of spares.
forget that Horizon, it has lousy aftermarket support for rally parts (and even when built, would still be a piece of crapola). You'd need to spend at least $3k to get a decent cage built. Add in the other parts you'd need, and you see how much cheaper it is to buy ready-built.
a good starter car needs to be simple and tough, with beefed up suspension, race seats, current-dated harnesses, a tripmeter, good skidplates and a freakin BOMBPROOF cage. Lots of spare wheels and gravel tires, snow tires, yada yada.
AWD is nice, but increases running costs (more tire wear, more moving parts to break, etc). FWD is generally cheaper and emphasizes driving skill and judgement instead of traction. Still, traction is really nice!
couple recent examples from various sites;
Subaru Legacy (oregon) $5000
Mazda 323GTX (NY) $4000
Ford Escort (NY) $5000
VW Golfs all over the place, $3000-7000
Subaru Impreza 1.8 or 2.2, $6000-8000
Scooby 2.5 RS non-turbo, $8000-15000
Get a good car and use your remaining funds to just go and run all the rallyXes and club rallies you can.
If there's any way you can swing it, budget a couple thou for driver training at a rally school like Team O'Neil or EuroRally. You'll have more fun, go faster sooner, be safer to yourself and your codriver and spectators...and be much less likely to immediately crash your new car!
Ciao for now,
LDR Co-Pilote and Wheel Twiddler
"...embrace loose gravel, beware big trees..."