I vote stay away. First of all, even if it's running (well), the 3.0L V8 engine has all the power of the 6 cyl. and the maintenance costs of the 540i. A BMW V8 is a nice thing to have but the 535i is a much better E34 candidate for a similar condition car, and that kind of money.

Second, you didn't mention it, but is it an auto trans? Expensive, and you have no way to tell what condition either the trans or the engine is/are in.

Third, all original M60B30 and -B40 blocks were Nikasil through (at least) '95. At only 100K miles, even if you could hear it running, it hasn't reached it's full self-destruct point yet (if it is Nikasil). Could have been factory-replaced with Alusil back in the day but check the casting number on the passenger side block near the forward exhaust runner. Google "Nikasil" and "Alusil" for more info.

Fourth, the price. Even if all is well with it, it will cost you to reinstall the trans and get it running. If you could do that yourself it might be worth it and you might get lucky with it doing what it's supposed to do. But if you have to pay someone else to install (or worse, repair) it, you're already upside-down on the purchase - and you haven't started the engine yet. If you have to replace the transmission (why was it removed?) you're well on your way to a parts car.

If you know/trust the seller, you may be able to offer $1000 and hope for the best.

530i's aren't horrible, but... why? Either get a 540i or a 535i (manual, preferably).