You have to look at it this way: If you go out and spend $150 on a guitar, you now have $150 worth of quality. If you go out and spend $600 on a guitar, you now have $600 worth of quality.
If you buy a cheap guitar, you're getting just that. It will hinder your improvement in the future and you'll just have to go out and buy a new one. You can actually stop improving because of your instrument.
The best bet is to go out and buy a moderate quality guitar. . saay around $400. I recommend a Fender DG-7 or DG-8. Fender are the guitar standard - like buying Technics decks. That way he's not dropping down insane amounts of cash and it won't hinder him for at least a year or so - less if he practices like I did when I first started, but chances are he won't.
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