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Most everything on the R65 is different than the larger boxers...including the frame. The larger models give you more leeway to tune, but on this bike you are just asking for trouble if you start playing with displacement..
Probably the best "tune" you could do would be to give it some modern Keihin/Mikuni slide carbs from Sudco and a Boyer digital ignition. Maybe go for dual plugs.
Otherwise, I think you are just asking for trouble.
$300 is crazy cheap. Buy it. If you get tired of wrenching with it, part it out on Ebay. I'm sure you could get 10 times the cash.
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1967 R50/2
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