To start a reclaimed wood project, remove the nails and, using a chop saw, cut off the rotten board ends. The image shows just how deeply water damage can intrude into some pieces.
Working with reclaimed lumber on your own can be time consuming and, without a proper milling saw, the work is labor intensive and hard on tools. You'll want a table saw with at least a 15 amp, 4.5 horsepower motor, and even with this setup, expect to be slowed down by the occasional piece of pine heartwood, which is very gummy. Because you'll need to change blades regularly — and precision is less important than endurance — you can economize by buying less expensive blades.