Can I make a nano-reef out of a 1 gallon tank?

If you don't have experience with reefing, pico tanks (nanos are mostly on the 10-30 gal range) are really hard to keep alive. I'd say go with a 30 gal expense wise i'd say that should ran about $500 depending on what you want to do. You can save up a lot by buying second hand. search google and you will see a lot of forums that can give good advice and also some members who sell equipment at bargain price some even sell livestocks as well. Try nano-reef.com or reefcentral.com.