IMHO, there's no finer buy for the dollar IF you are prepared to do your own work, and these cars are so well engineered you will find it great fun to do. Parts are actually inexpensive compared to more recent electronically over-burdened vehicles.

There's lots and lots of advice on buying used 126s here. Also feel free to ask when you are looking.

Remember, it's easier and cheaper to fix an engine than it is to fix a rotted, worn body or a bad interior. At the extreme, a reman diesel engine will run you, say, $5k. A concours paint job $10k....and you may still have a worn interior. Checked the price of new leather seat covers recently? Ther's a lot to be said for warm, dry climate cars, though 126s have excellent corrosion proofing. Just remember, these cars are now 10-20 years old.

Also, check Mike Tangas's excellent thread (search on his name) on bringing back his 560SEL from the dead. Something tells me he did not pay a lot for that car.