Suspension, Tires, and a nice, powerful engine. Get some nice extended a-arms, elkas/works/fox shocks, holeshot tires, and a ported top end with an F7 and VF3's. I'd say thats a good start. Then a wider axle, extended swingarm.
I wouldn't even bother. If your looking to be competitive in MX or XC you will need suspension. Take it from me, you can have one of the best built engines and still lose. I have a motor thats completely built for MX in my TRX thats at right around 60-65 HP and stock suspension and I get whooped because I can't get the power to the ground like the guys with good suspension can. Go with AT LEAST Work's front shocks. Elka is better, Fox is better than Elka, and PEP is the best you can buy. Get at least a +2 front end and +4 axle. Extended swingarm, 18 inch tires in the rear 21 in the front, and THEN build your engine.
ya i second that my old man has a KTM sx250 powered blaster that runs tops but is mostly stock chassis except a lt shock and ext stem. my blaster with origional engine and fully modded chassis will spank it all day around the track. control is where the blaster is a bit short.Needs to be longer for woops and jump control, wider for turnng, and if your taller 5'9 over i would consider extending the steering stem. use a 400ex or lt400 rear shock banshee axle. the front shocks and arms are where you might have to spend real cash. as for the motor my best and simple power upgrades. any aftermarket pipe, filter, reeds pull your cylinder off and remove the head. clean up the ports and get the head milled more hemi. and JETTING use a 15 or 14 front sprocket.
Is there any displacement restrictions in the class you want to race in? If not get a ported 240 with a +3 or +4 crank. Either way you will need full suspension.
You never said what kind of racing you want to do. suspension is key just like everyone is saying but depending on what racing your doing will slightly alter the mods you will want to be doing