There's always the potential for problems.
Most won't show up until you have the engine fired and running. Do what you can to avoid the obvious issues.
Look at the motor before buying. Look for leaks, poor repairs of any kind, check the oil for signs of water, and check the water for signs of oil (if possible). Take a look at the hoses, and see if there are signs of dry rot.
These should be tell tell signs of how the parts were maintained. But there are no guarantees in life. I've seen junk yard motors last forever, and new ones break. Do your best to put the odds in your favor, and hope for the best.
Make sure the owner's "story" is consistent. Ask questions, and get a feel for them. Most are straight shooters, but the shady ones can usually be found out. Especially if you ask a question on the phone, and again in person, you could get two different answers. That should alert you. But if they remain true to their story, it's probably a true story.
It doesn't sound like it's possible in your story, but a lot of times you can inspect the vehicle. Even if the engine has been pulled, the vehicle can give you an indication of how well things were maintained. It would have oil trails, if it leaked, or body damage if it was in a demo derby.
wow... that was a lot more rambling than I intended.....