Nice car. Not a bad price at all. Personally I would consider spending a little more and buying a newer one with fewer miles, but for 10k you're getting a lot of car. Contrary to what some people are saying, the E-36 is considered to be quite reliable. My BMW mechanic has one and considers it "bomb-proof". If the car has been properly maintained it will continue to be a great, fast car for years. The most common problem I have heard of is that the oil sump bolts can come loose and mess things up. Check out some of the forums and you'll find out what typically needs addressing-differentials are not typically one of the items and people who have cars with 915 trannys shouldn't throw stones re: BMW synchros.
As far as repair expense-there are tons of independant BMW shops that do good work for reasonable prices. Parts are extremely cheap and plentiful for that car mainly because they made so any of them. Also, chances are good that it didn't hit "red-line" at every shift because it seems like every woman who wears Gucci has had a BMW-often times a coddled M3. Comparing the cost of ownership of an E-46 vs E-36 foolish for too many reasons to post here-totally different animal.
I've owned many BMWs (no CSLs or M3s) over the past twenty years and I'm still an active BMWCCA member. I have only heard good things about the E-36 M3. It's a solid bet. However, a guy who is heir to a Jaguar dealership throne certainly knows well of cars that are costly to repair and depreciate rapidly
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