I think it is smart of you to look at e46's which are relatively modern, yet pretty much fully depreciated, so are relatively cheap if you DIY. The fact that your dad is a BMW guy who knows has experience with them makes this a no-brainer.
Agreed - if you don't want a welding project, look for a MY 2001+. However, I do like that it is one owner and (presumably) has all records. So at least you do know what has and hasn't been done. My only concern is if it has been on the BMW recommended oil change interval of 15k miles. Do a google (select images) on "oil sludge."