I was going to say go for it, untill I read
Originally Posted by Matsim
This car would be my dd for this summer. SO I want it reliable
I don't want to be Debbie Downer, and discourage you from a potentially awesome purchase, but this could turn into be a costly nightmare...
not many S38's on the road, and if so they are likely maintained by their owners...these were in very expensive BMW's for their time...I'm fairly mechanically enclined and would really have a hard time wanting to justify this purchase if I really didnt' know what I was getting into.
Futhermore, do some research about parts availability on these engines...it's not like you can just run to your local salvage yard and snag some cheap used parts for maintenance etc...much of this stuff would need to be dealer only, or ordered from sites like RealOem.com
for DD reliability look for a E30 with a clean M52 swapped in...or similar.
they can be had for that price range in turn key ready to go condition
goodluck with your hunt!