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Found a basically stock '65 CH in good condition for just under $10k. A chopped one would be worth less. How much less would depend on when it was built, how it was built, what it is titled as, and its present condition.
Is the frame a custom frame, or is it a weld-on or bolt-on hardtail? Who made the springer? There were some good ones in the '70s, but there were some that were junk.
To me, if the engine was fresh, the frame was either a custom or a good quality weld-on hardtail, the springer was a good one, the overall design wasn't too radical, and the overall condition was excellent, then $5k would be tops. A bike in average condition would be worth about $2500. Anything less than average, or anything that fell short of what I wanted, would start the price falling rapidly.
I'm with Skip. I can't see paying more than 5K no matter what the condition on a "custom" sportster that old. Now, if it were completely stock (or really close) and in really good (near mint) condition... that'd be another story. But I'm cheap and look for deals. They are out there.
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