I bought a cheap Squire Strat off of Craigslist back in June, and I'm slowly upgrading it to be a decent playing/sounding guitar. I am convinced that I can achieve this for less than buying MIM or a USA strat.
First things first is that I loved the way the guitar looks, but that's not hard to come by. All the Strats, cheap or expensive, look great to me.
Second, it needs to play good. I started with a decent playing neck. I have not tweaked it yet, but there is a slight bow, and at least one fret that needs to leveling. I'll get to that later, as it plays pretty good as it sits.
As far as looks go, I want to remove any evidence of it being a Squire. I replaced the neck plate, as it had "Squire" stamped on it. It now says "Fender". The tuners and bridge saddles also had "Squire" on it, and the new parts will get rid of that. I also sanded the neck, including the headstock, so the old Squire decal is gone. I left the decal on the back of the headstock that has the serial number. That is a giveaway, but I'm not doing this to fool anyone, as I would disclose all this if I ever sell it. I just don't like seeing Squire. It gives me a bad vibe, and would also do the same to the audience. OK, so I guess I am trying to fool people, but not to cheat anyone.
Starting in a good place with a good looking, good playing guitar, I'm going to hit the main parts that make a guitar sound good, and play well. I ordered a new bridge, nut, and tuners. It plays pretty well already, like I said, but it needs to stay in tune of course, and new tuners really helps there. The nut and bridge really help with tone.
The upgraded bridge is thicker and is supposed to be made out of a better metal, which affects the tone, and it's says "Fender" on the saddles.
The next obvious thing that affects the sound is the pickups. That's a tricky one, as you can really go all out and spend some money, but I'm not even sure what sound I want.
I did order a cheap pickup from Amazon that I will put in the bridge position. It's a stacked humbucker that had some great reviews, but it's really cheap, so I'm not expecting too much.
Musiclily Dual Hot Rail Blaster Humbucker
I will also add some stain to the headstock. It's so white now, specially after sanding. It looks some worn-in color. I might add a decal of some sort .Maybe a flur-de-lis, but maybe leave it blank. I also plan on scalloping the neck.
I'm sure I'll add some other pickups, even if I end up like the Hot Rail. Maybe I'll go with all Hot Rails, but I'm thinking I might want a more traditional Strat sound in the bridge.
Right now I am $200 in. After installing the new parts, tweaking the neck/frets, if I am happy with the results, that is a great deal. If I buy a used MIM Strat for $200, it would not have the quality of parts I am adding. It definitely would still need upgraded tuners and a nut, as I have a MIM Tele that I made those upgrades to and it made a difference.
If I spent the $600 for a used USA Strat, would it be better than my modded Squire? It probably would, but that's 3X the price. The bottom line is that it has to be a good playing and sounding guitar, so no matter what kind of "deal" I have, it doesn't make sense if I don't end up with a quality axe.
There are some other little things that might make a bit of a difference like an upgraded input jack and pots. Those are pretty cheap upgrades, and I hear/read that they can come in to play. I also read that those things make very little difference, if at all.
We shall see.