RF sources location system
One way of doing it could be as follows. You buy a directional antenna (for example a Yagi type) for the intended frequency plus an spectrum analyzer/module/receiver able to tell the RSSI, find an elevated position in your town and from there rotate the antenna until you get a peak in RSSI. So now you know the direction of the transmitter relative to your location. Then you could find another elevated position somewhere else in the town and repeat the procedure. Finally an approximate position of the transmitter can be found on a map by intersecting the two found directions.

About your question of building a receiver yourself, I would really advise against. A low cost solution could be this one: http://www.ti.com/tool/cc1120emk-868-915 . This receiver can be connected to a laptop through CCDebugger (low cost device from TI) and then controlled from SmartRFStudio software which is free.