BMW's are great cars, but I might be biased
If you are looking at 5-8 year old cars, you will probably be getting one without a warranty, correct? If I were you, I would look at cars slightly older since you won't have a warranty either way. I would look for a lower mileage 325 or 328. The 318's are known for being rather anemic.
If you are set on an e36 (chasis code for 3-series BMW's from 1992 to 1998), I would look at anything 93 and up. The first year of any model car tends to have a few more bugs to be worked out. For $10,000 you should have no trouble finding a nice 325i.
What exactly are you looking for - power, mileage, efficiency, etc.?
If you do end up with a BMW, the first purchase you should make is for membership in the BMW Car Club of America (BMWCCA). $35.00 per year gives you access to one of the best auto enthusiast groups around, discounts of 10 to 20% at all BMW dealers, and a subscription to the Roundel, which is one of the best magazines around, BMW-related or not.
_________________________________