Possibly bad gas causing incomplete combustion as Tim has suggested but I wouldn't think so.
I would investigate this knock further as it could also be worn out bearings or maybe just a lifter tapping and best case a bearing going bad on a belt tensioner or......... I would try to pinpoint this if you feel it's internal by using a dowel (wooden rod) or long screwdriver - place one end onto your earlobe and the other on the block while you have someone rev the motor to cause the knock. Doing this greatly amplifies the sound and by moving the end around to different parts of the motor can isolate and narrow down where it is coming from. Noise from the top end can usually be fixed without a major expense, bottom end usually expensive. This may not be a vehicle worth purchasing.
If uncomfortable trying to find it yourself, bring it to a trusting mechanic and ask his opinion.
Good Luck