Find someone who is upgrading their machine and then like snipforfun suggested, get a machine that has a 5x7 hoop. You will not be sorry. Buy a used one and you get a more bang for your buck.
At least that is what I did--I found a Janome 350E used and got it for about $665 here in Poland. Keep watching Craig's List. I've seen almost new machines for sale on there.