An outstanding choice! Very mild for beginners, and light weight and adequate power (by yesterday's standards...
) make it do well for more advanced riders. They came out at the height of the 1st oil crisis and were marketed as commuter / economy bikes. They were Kawasaki's 2nd model of four-stroke, after the 900.
I commuted daily on a '74 KZ400 (virtually identical to your potential '76) for a while to the tune of 10K miles. They are sound machines. No weaknesses, as far as I'm concerned other than a tendency towards top-end oil weeps. Kind of an odd designed rocker box prone to weeping. Careful assembly and good O-rings can keep it at bay. Cured (redesigned) on later models.
Parts availability is generally very good, right on into hard-core engine parts. Outstanding world-wide support forum at
www.kz400.com. They came with chain driven counterbalancers, which made it very smooth for a parallel twin.
My 400, which had 20K hard miles at the time (it had been seriously neglected by PO) got 50 mpg on my 40-50-60mph, 30-mile one-way commute. A 'fresher' engine than mine would probably do better.
As with all used bikes, the condition of the one YOU'RE looking at will override almost any 'generic' issues with the particular bike.
Good luck with it, and keep us updated what you do.
Kirk
Here's a shot of mine, fulfilling it's design mission: commuting.