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Full disclosure, I have an SR5 AE86 Hatch...
What you described is basically the holy grail for North American AE86s: An unmolested, low-mileage '87 GTS hatch with a 5-speed with excellent maintenance records. While I personally think the prices are greatly inflated on these cars (still due to the Initial-D tax) he should be able to get that much for it if he is patient and found the right buyer.
If you really want it, I'd mention to him that you are looking for one of these Corollas and have $4000 in cash (and have it, in your hand). And see if you can work out a deal.
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