NEW Member with a possible lemon

I have just purchased a 1982 750 ltd with about 14k miles. It did not run and had been sitting for some time in a garage. After purchase i realized there was no oil in bike and after adding oil,fresh gas,and new plugs i tried to start it.fired right off but i have oil coming out of join in exhaust pipe under the bike and a knock in motor. How would you start trouble shooting??
I learned to ride on 440 ltd and have always wanted a 750 and i may have just jumped the gun and bought this one without thinking it through...hope to make it work though...any help would me much appreciated. (:

If oil is leaking from the exhaust junction, oil would be pumping from a cylinder probably. Pull your plugs and see what they look like. At least one will have oil on it, then you could do a compression test, but it would have to be torn down, top end at least for inspection. Pulling the oil pan for inspection would also be a good idea. If there is Bearing Metal in the Pan, then a complete tear down would be needed. So either a burned piston, pumping the oil, and slapping in the bore. Or maybe a lower end knock from a bearing if it was run low. then you might decide to try and find another Motor/ Bike, or rebuild the one you have depending on damage.

kinda what i was fearing.I wont be able to touch it till late this weekend or early next week so it will plague me till than lol

Make sure there is not too much oil in the bike. Not having oil in the bike at first is suspicious. Uncle resurrected a bike and thought no oil in the bike so added the correct amount. Then bike warmed oil was coming out of breather and other areas. He quickly shut it off and drained the oil and said there was a pant load in there. Some came out like crude. He let it drain overnight. New filter and refill with fresh and he said it was fine. Good luck!