Want to help a friend fix his boat, I am an Auto Mechanic with lots of experience in my field but zero in the boat industry. I know i can figure this out, but would highly appreciate some guidance, tips, or things to watch out for.

So far I know that it is missing the outdrive, and I believe that I will need a Volvo Penta Outdrive, but read online that I can convert it to a Mercruiser (which says its labor intensive but more affordable?)

Help in any way please & thank you!

If it was 21’ or less, it likely had a VP AQ125B 4 cylinder with a 270 model outdrive. They were actually super reliable, simple, and durable powertrains. My uncle still has my dad’s old ‘85 1950 that he bought brand new. That engine must have the equivalent of a million miles on it, lol! Countless summers of water skiing and tubing behind that thing.

I’m sure there’s still parts and stuff out there if you search hard enough. I don’t think the conversion from VP to Merc would be worth the time or expense on a 40 year old boat. You’ll also likely unearth rotten wood framing that just makes it that much more complicated. Find some used parts, slap them on and go enjoy some water time.

First thing I would do on an older boat like that is tap around the transom and make sure its not a soggy mess, before spending any more money.

This probably isn't what you want to hear, but if its a Bayliner built before 2025, its probably rotten.. (joking aside)... baylinders up until like 2005 were built down to a cost.. I know, I just sold my 96 bayliner 2050.. Thats not to say they aren't great boats. I loved mine!
However, take the advice above and start by tapping around the transom and stringers.. Also, if you have a soft spot in the floor anywhere, that means that everything under it is toast. I completely restored my baylinder.. took it down to the hull and rebuilt the whole structure/transom/floor/etc.. Its a lot of work but its the cheapest way to get a "structurally new" boat for the right price.
Also, the "tap" test is a good start, but what you should really do is take a 1/4" drill bit and drill test holes in the stringers about an inch or so up from the hull starting at the transom and work your way forward.. If you get nice clean wood chips, fill the holes with 3200 and buy a lottery ticket.. But if you get black mush, well then you are in the same "boat" as I was.. You should also do this on the transom from the inside starting at the bottom..

I'm not telling you all this to discourage you, I just want you to understand what you are most likely in for unless the work has already been done by a previous owner.

A 40 year old Bayliner is a Ford Pinto in the boating world. Sure you can make it run/work.......but is it really worth spending any money on it?
Converting it to anything else is massive waste of funds/time. Might be worth it if you can find a used OEM replacement to bolt on it. As others stated, the transom/hull could be rotted by now. (equivalent of a rotted chassis on and old truck.)

FWIW: I once owned a 90's era Bayliner. I bought it new and it was fine but they are cheap boats.

You can't switch from Volvo to Mercruiser without re-glassing and filling in the Volvo cutout, and re-cutting for the Mercruiser.

Nothing wrong with the 280 Volvo drives. They're strong and can be made efficient. Lots of used Volvo drives around. 290s all had hydraulic trim. The 290s also came with duo-prop and single prop. I'm not a fan of the duo-prop system.

Is there an engine and transom mount?

If you just ha e a bare hull...it takes a lot of effort and cash to get it on a path to seeing water.

Maybe better to seek out a donor boat with all the parts to switch over...or a more complete project.

My very first boat that I owned outright myself was a 1990 Bayliner 2050 Capri with a 305 V8. I loved that boat, it was perfect for me at that time. As mentioned above, Bayliner's objective then (and now) was to get people on the water, into boating. They were very effective and efficient at controlling costs via many methods. They really were never meant to be 'generational boats', i.e. something you would buy and pass down. One that has had proper care and stored indoors all its life would probably be okay even after 40 years.

THAT does not sound like what your friend's boat is like...just inferring a lot of things un-said. I get a picture of more of a basket-case scenario? If so, your friend will need to figure out what it's worth to him to bring this boat back to life. But even a used engine/outdrive will be a couple of grand. But again as noted above, it simply is not worth a DIME if there's rotted wood in the transom. Your friend should not spend anything on a boat like this.