Shouldn't be too big of a deal to find an E36 anywhere from $1500 - $5000.
http://sfbay.craigslist.org/eby/cto/3343855217.html This one should be ok, I'm worried about how there's no good picture of the repairs that caused the title to become salvage, but if you could get it for $2200-$2500 it's a good deal.
(I own a 318i. My biggest issue is lack of power, but considering this is your first car I'd say keep the power low. Plus there are a ton of mods available to make this awesome since it's the same chassis as the e36 m3, which means all of the suspension parts transfer for the most part.)
From there, tips to avoid getting hosed:
Look for puddles: Be vigilant about this, if you go to someone's house, they may have moved it from where they normally park it so keep an eye out for stains and ask about them if you see them.
Listen to it idle/rev the engine gently in neutral: If it makes a metallic clicking or thrumming sound, it could have damaged internals or be low on oil.
Look for things that don't make sense, like parts left/right that don't match, ripples in paint/body, mismatched tires. Again, ask a ton of questions.
There are several others and I'll add some more of my own when I can think of them.