Let me see if I understand everything correctly. You purchased an out of warranty X5 at auction, $7K under market value, with above average/high mileage.

Sounds like your friend did you a favor, however you don't understand the auto industry very well. At this point you need a better understanding of the situation from a macro level.

As already pointed out. Your options are:

1. Dump the car.
2. Get with a good mechanic or shop and sort out the issues.

The rest is a debate for another thread really. Out of warranty BMWs aren't as big of a deal as people make them out to be. However, one must have the knowledge and resources to take them on.