e39 535 - buy or walk?

Hi, I'm about to take my first jump in bimmer ownership and would appreciate a little advice please!

I've seen an R (98) 535 at my local second hand dealership. It's £5k, has done 129k (I'm not scared of highish miles), full main dealer history and has all the toys, including sat nav. What's more she's a manual which is what I really want.

Only thing concerning me is that there's only 1 light before the next (inspection I) service and more importantly there's a bit of a tappety noise.

First off, how much do you guys tend to pay for inspection I services at an Indy?

Secondly, the tappety noise - it's a ticking noise, only audible outside the car - sounds almost like one click per revolution (if that makes sense), slow and steady at tickover and rises with revs.   Any ideas how much of an ache this could be wallet wise? I'm guesng it's a faulty hydraulic tappet.

In short, in my place would you buy or walk :-D

thanks in advance!