*shoots fellow responsible for headlights*
Now that that's out of the way....
It's a great looking car otherwise. Weigh your options, however. You can get a 318 or a 325 in that year. Fuel economy isnt really a factor, because while the 318 has four pots, it revs higher and pours its guts out more to keep up compared to the 325, which has a lower redline, and generally revs much lower in general. Plus when you DO nail that gas pedal, you're in for one hell of a ride.
Then again, you don't have to deal with Motronic on the 318i. So you've got options. Most of the cars did have odometer problems, I know mine bit the bullet at 114,000kms because I have the paperwork detailing the replacement of it.
If you are good with bodywork, do the world at large a favour and put the stock grille and headlights back in.
Unless, of course, you like it.
By the way, welcome to the family.