Sounds like a good deal to me. I only paid $1800 for my car, but it had some problems, like the heater didn't work, A/C didn't work, stuff like that.
Here are some links:
http://auto.consumerguide.com/auto/u...90602061000108
http://www.fueleconomy.gov/feg/noframes/6641.shtml
Good stuff here:
http://www.unofficialbmw.com/frame_e34.html
On the unofficial bmw site, you'll have to look around and click on a bunch of stuff, but it has DETAILED info on how to fix stuff and what you can expect.
Flunky