Almost definitely better to find a boat on a trailer already...a new trailer is going to set you back at least 1500. Check out this website: www.boatforsale.net
The boats are primarily on Lake Ontario, but if you're buying it on a trailer that's not a big deal. Remember that the prices are listed in Canadian dollars.
There is a broker in the Niagara area that specialises in "fixer-uppers" - http://www.yachtware.net/
you might be able to find something there. Headroom is going to be a bit difficult to find in your price range, but if you see something that you like, don't be afraid to put in a lowball offer. Mention that you had to pay for your kid's new wheelchair and that's all you could scrape together right now....
In the longterm, you might find it's worth saving up a little more and getting a slightly larger boat. Anything inexpensive that you buy, is going to require some time and money in improvements, and it is hard to recoup these when you sell. So if you sink the money into something that you end up keeping for a little while...it isn't going to cost as much in the long run.
Also give thought to the rigging process. Before you buy your boat, check out the clubs and marinas in your area to see if there is one that offers "drysailing", where you can take the boat out of the water on the trailer to store it between sails, but can still leave the mast up. If you have to take the mast down between sails, then concentrate on really small boats, because raising a 26 foot boat's mast and securing all the rigging is not something you can do in fifteen or twenty minutes.