I built my first electric guitar with wood from a construction site junk pile and hand tools. I've built my work bench from wood that came from heavy-weight pallets (some random hardish wood from China) that were given away by someone on Craigslist. I have piles of wood sitting in my driveway that are from trunks of a tree cut down that were cut into slabs using a chainsaw.

Tools-wise I bought a used bandsaw for cheap. Added a riser block and made it a pretty awesome tool. I bought a jointer from someone down the street, again for cheap, replaced the knives and it's pretty good. You can get started for reasonably cheap.