If your budget is limited when considering a good Kids Mountain Bike, then consider a good frame with cheaper components. When he's good enough to need better parts, upgrade the components. Time spent in the garage wrenching with your little biker can be as valuable as time on the trail! But if you're not mechanically skilled, spend the money to get quality.
When customizing the bike, please consider building up a twelve or thirteen size frame with disc brakes. Then fit it with smaller twenty four inch wheels and a smaller crank to start. As the child gets bigger, move up to the standard twenty six inch wheels and a standard crank.