1995 BMW 525i no engine power

I am looking at purchasing a 1995 BMW 525I from a friend that has 99K pampered miles, the car has been properly maintained. It starts and idles fine, there is no visible smoke from the exhaust. When you press the accelerator the engine has no power, when in gear the car barely moves. A mechanic told him it is the head gasket. Is there any test for the head gasket? Should I test the compression in each cylinder? Is this a common problem in the 525I? Any suggestions would be greatly appreciated, it is a beautiful car but I hate to throw money at the wrong problem. Thank you.