Check the archives, or just read this month's list and you'll get a pretty good idea all the things that can go wrong. Its a complicated machine but if you can do your own work there are lots of folks out here to help you with diagnosis and talk (type) you through repairs. Just don't make the mistake of paying too much up front. As someone said a few weeks ago, These cars are fun to drive, and you get looks from people when you drive by, but one thing they are not is VALUABLE. $1000 is probably low end for a transmission rebuild and I've read that replacing a heater core could run that much if you have it done at a shop. The HVAC system is vacuum operated and depending on where you live the rubber diaphragms in the vacuum actuators may be bad, so check out all the vents, AC, heater modes just to know what you are getting into. I drove my car pretty hard during the test drive to make sure as I could that the transmission was OK. Be sure to try a panic stop with plenty of room in front of you to be sure there are no brake problems. (See archives for "brake bomb")

Don't get me wrong, I love my 86 735i! Just know what you are getting into.

Ben