I (Chris) have owned a lot of these bikes… in fact the XT500 is possibly one of the most fun street bikes ever made. Sadly, it sucks as a dirt bike as it’s too heavy and too torquey to be useful on anything other than light gravel or tarmac.
However, the XT500 (or the more competitive TT500) is a great candidate for a full on street tracker as it’s so much fun when the bouncy suspension is stiffened and the whole bike lowered with much better rims and tracker tires.
This little thing has a high compression big bore kit, an excellent RS36 smoothbore carb, lumpy cam and weighs in at under 290 lbs. It’s a beast!