I wouldn't pay more than 1500 as there's no way to actually know the true mileage. I payed 2000 for my '87 325is that needed work similar to what your describing but that was 3 years ago. For comparison I just bought a '94 525i for 2200 2 weeks ago and it's in great shape with only a few little repairs needed (currently my daily driver). Sign of the times economy wise I guess. As far as the what your looking at you say the water pump was done, did that include the timing belt and tensioner? If not the job wasn't done right, possibly not at all. Minor dings and scuffs are to be expected, the rust however COULD be a problem. If it's just surface rust maybe not but you'll need to clean chassis grounds and such. How does the car handle? Drive straight, stops and stops square? Is the shifter tight and clutch "feel" right? Get under it look at the rubber on the rear CV joints is it intact? Does it have any weird vibrations? Look around the cooling system for signs of leakage, an overheat can warp the head. Clean title that matches the VIN all the usual blah blah blah. If its all in order and you like the car go for it, they're not hard to work on and parts are available from many places, one of these cars in good shape and properly maintained will go 300,000-500,000 miles and rarely break down. I have 2, both were daily drivers for years one of them 7 the other 2 and the later I didn't buy for use as a daily, it just happened that way and the car could still do it if needed.