Just bought this baby.
2nd engine with 70,000 approx up.
Heater has air lock, needs bleeding.
Else good to go.
Will update this log.
I have an e36 318i, also had problems with airlocks leading to the temperature gauge on the wrong half of the scale.
If you look on the side of your engine on the thermostat housing there is a bleed screw. Loosen and top up your radiator until you can see water coming from the bleed hole.
Don't run the car for too long with an airlock as if it overheats the alloy head may be warped!!