What people can do and what they do do are a little different. I can't think of anyone who stopped building their rig at $3k, but it's possible to produce demo-quality records with a $600 computer, a nice A/D/A converter and software like Reason, or Ableton. All of which can be purchased with $3k. I personally own about $10k of recording gear and instruments, and I've never made a penny off any of it and don't regret the purchase.
That aside, the guy who recorded the "Owl City" records started out by releasing tracks from his parent's basement while working at Coca-Cola. Imogen Heap I think started off on home recording gear and recorded her entire first album herself. Also check out YouTube for Ronald Jenkies, that will give you an idea of what you can accomplish with a modern workstation, which will run you $3k new, decently equipped.
Edit: It has also occurred to me that if you're a band, and you can perform your music well (everything in 1 take), you can probably buy enough studio time to get a good sounding album for under $3k. I can't think of any specific music this applies to, but a great deal of grunge music in the 90s was recorded in this kind of a scenario.
That aside, the guy who recorded the "Owl City" records started out by releasing tracks from his parent's basement while working at Coca-Cola. Imogen Heap I think started off on home recording gear and recorded her entire first album herself. Also check out YouTube for Ronald Jenkies, that will give you an idea of what you can accomplish with a modern workstation, which will run you $3k new, decently equipped.
Edit: It has also occurred to me that if you're a band, and you can perform your music well (everything in 1 take), you can probably buy enough studio time to get a good sounding album for under $3k. I can't think of any specific music this applies to, but a great deal of grunge music in the 90s was recorded in this kind of a scenario.