Looking for a used best start/mustang i can get under $500 maybe a little more. I don't care how beat up it is.
Must have a whammy bar or be able to have a whammy bar

Anything else I should know when looking for a strat/mustang? Looking for shoegaze/punky/indie sound.

also do old telecasters have problems with frets dying out bending on the high strings past the 12th fret?

Any tips for setting up a pedalboard? How do you figure out patch cable lengths and get everything organized?
Theres plenty of options for strats, look around for used ones and you will probably get a good deal. The MIM strat is pretty good, as long as your not expecting a floyd rose for a whammy.

Telecasters dont have any specific problem ive found, all old guitars get issues eventually with fretwear.

For setting up a pedalboard theres loads of youtube videos to watch and articles. Figure out your pedal order, set them on the floor, select pedalboard and attach. You can buy cables or make your own with bullet slugs. Id also get a power supply. Most boards use velcro, saw the holeyboard a week back, pretty awesome, you could buy/make one and use cableties.
Gibson 58 RI VOS Custombuckers
Mesa Lonestar Special 2x12
If you want to have sweet shoegazey tones, then I'd recommend a Silvertone or a Tiesco for your budget range.

If you're dead set on Fenders, then you'll want to just try different Mustangs until you find one you like. The original Mustangs are basically smaller Jags, so they're cool (and also expensive)

What I would do is look at CIJ models because they are a cut above Mexican made in my opinion.
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How do you figure out patch cable lengths and get everything organized?

put two pedals next to each other and see how long of a cable you need? that's pretty self-explanatory. As for organizing put them on a board using Velcro. And a power supply is a must. I recommend the VooDoo labs pedal power.

This is a great guide to setting up/making your pedalboard: