A couple of (rather dire) thoughts... E36s had a notorious problem of the ceramic water pump just disintegrating, without any warning, I think at about the 80,000 mile mark. I don't know if this occurred with the 4-cylinder engines, but I know for a fact that it happened with the 6-cylinders. So unless you know that the pump had been replaced with a metal one, that could be the problem.
Also, and you'll have to do an Internet search on this, but there was a problem with the 4-cylinder engines (again, I'm not sure whether the M40 or M42 or both) with the timing chain seal or water pump seal some such thing, causing loss of coolant in that area of the engine.
Needless to say these are some of the more dramatic things that could be the explanation, I hope it's something less involved.