As others have said, you're not going to get 500 HP, good handling, and any kind of decent reliability for $7.5k.
You could grab a cheap classic with a common motor (Ford 289 / 302 or 351W; Chevy 350; Mopar ???) and make a lot of power without breaking the bank, but it will handle like an old car (as expected). I know from talking with a LOT of car nuts that a Ford 351W can be build up to ~400 HP with a decent 408 stroker kit, heads, intake, cam, carb, and supporting parts. It'll also twist the chassis of whatever you throw it into if you're not careful.
You could forget about going fast in the straights and buy something that handles nicely, like an older Miata. Then, as you build up extra cash later on, you could look into a turbo setup or LS1 swap.
You could try to go for the middle group between power and handling by looking into a used '99-'04 Mustang GT, or LS1 F-body (Camaro, Firebird / Trans-Am). For that price, you're likely looking into something with a lot of hard miles on it, though. Add bolt-ons as you scrape together more cash, and then a blower when you save up another $3-4k. The best part about this option is, barring any obvious problems with the car, you get to drive it NOW and build up the power as time goes on. It becomes a project, and an addiction, but it's a ton of fun.
What exactly do you want 500 HP for anyway? Are you planning on turning this into a drag car, or is it still going to be used on the street? For street use, especially in the sub-$30k price bracket, I'd aim for more like 300-350 HP and call it a day. The difference between 350 and 500 on the street is negligible unless you're out picking fights with Corvettes and Cobras all day long, and going past a HP level easily achieved with bolt-ons becomes expensive REALLY fast, especially when you strap a blower on something without any regard to the bottom end...
