Hi Dave, if you have the usual stage 1 mods, fuel pump, remap, exhaust induction kit you should be able to hit 370bhp without the need for cams, when I bought mine it came with the dyno sheet showing 380bhp with the above mods (no uprated cams) and this was at a 1.6 bar boost. Having had it dyno'd since (new engine in),it is now running 355(ish) at 1.4 bar.
One of the major issues I heard about was the rods letting go, this would be dependant on the type of use and boost you are going to be running, aswell as mileage, past use etc etc.
Like I say mine is running roughly 355bhp and is quick enough on the roads.
If you were planning on changing cams, maybe look at some from an 8MR, they are mean't to be a nice, cheap upgrade to those on the 5's.
I would do what you can with the engine, most certainly a timing belt, having had mine snap on the 5 engine, its pretty painful lol, head gasket aswell, again one from an 8MR would be more than enough (I am sure they fit, best check though) and new oil of course, just replace what you can afford really, better to do it now than something going wrong......this is just what I would do, I am sure others will have different opinions.
Cheers
Matt