The M50 motor-ed e34's are great for working on - lots of room under the hood, great and logical layout for all the maintenance bits.
First thing to verify - if there's a water leak, make sure that it's coming from the radiator/waterpump/hoses/tstat housing. If it's in one of those areas, it's a snap. If it somehow happens to be coming from the motor itself and could indicate a head gasket problem, run away!
Okay - presuming that it's a leak in the former "easy" category, there are a few weak spots that you'd likely want to take care of anyhow. First, the radiators on these cars have plastic tanks. These tanks can leak at the top, where the plastic hose nipple gets brittle. They also leak at the bottom, where the ORings get brittle and lose their seals. On a '93, good preventive maintenance might be to simply swap the radiator out. Second -the water pumps are really only good for 60K or so miles. They've got plastic impellers that break down, and if the plastic impeller doesn't let go, the seals might let go instead. So the water pump is a good thing to replace. And while you are in there, all of the hoses are up for renewal.
The good news is that all of these maintenance issues on an M50 motor are a snap. As long as your leak is up front and not from the block, it should be a piece of cake.
--Micah O'C
(used-to-be '92 525iT owner)