Welcome to the forum! First and foremost -these old bikes are a lot of fun once you get them running proper. I mostly use mine for zippy city riding, but it is equally at home on whippy mountain rides where you are traveling about 50mph. Freeway is doable, but a well running SOHC xs400 tops at about 88mph (just enough to take you back to the future).
I have the same model from 1980, complete with wire wheels and drums f+r. Highly recommend replacing both sets of brake pads, the ones you have may be old and delaminating. This means big pieces of the pads break off, and can cause wheels to lock up (sketchy!)
How many miles on the bike? Was it stored properly (gas removed or stabilized)
First, run a compression test. I'd recommend charging the battery for this, because it is hard to perform with kick start. Check fluid level on battery before charging (though a new battery will probably be needed givin how long it sat). If compression is good, move forward with other updates.
There are many things that will need to happen before your bike is road worthy, the good news is that almost all of us have been through all of these issues, so there is lot of support right here, a quick search away.
Some of the common problems are charging system problems (caused by brittle wires leading from stator and magneto, lots of how to's on here), voltage regulator failure (which are cheap to replace), weak fuse holders (buy a generic claw type for cheap). Also, the carbs on these models are often set up factory lean. You will undoubtedly need to rebuild or at least clean carbs thoroughly, at which point search forums for float height and check your heights. Because of a discrepancy in servic manuals, they can be set up with not enough fuel in the bowl - so make sure that is right before proceeding (running lean will yield a bike that rides ok, but will cause excessive heat and damage to your motor)
Change the oil, change the filter. Check dates on tires, change if more than 4 years old. New tubes as well.
I had major problems with the stock exhaust pipes, whose baffles would come loose (non adjustable), and cause poor running and terrible rattling sounds. I'd recommend working with them until you know everything is adjusted and running well, after which, you can choose to pod and pipe the thing, or just ride it till there is a problem. I repurchased the stock exhaust, not wanting to alter the quiet sound of the bike - but my second set failed. I ended up with emgo shorties, loud as all get out by most people's ascerations, but I like the sound - gives the little bike big character.
It all sounds like a lot, but if you just commit to these changes, get all the parts, you can be riding after a dedicated weekend of smart work (work smarter not harder)
Congrats on your acquisition, let us know how it goes, pictures, pictures, pictures!
