The spongy pedal feel started a month ago after my freinds and I changed my pads and rotors.

Ok I am trying to flush the brake fluid hoping that air pockets are the cause of the spongy pedal, heres the problem:

The Motive Pressure Bleeder is full of brake fluid and i set it at 19 psi. Then i attach the hose to the bleeder valve and open the bleeder valve, the brake fluid starts to come out for about 30 sec. but then it just stops. I checked the gauge still at 19 psi but the fluid is not going from the pressure bleeder to the resevoir either, it started to and then stopped (at the same time the fluid stopped coming out of the bleeder valve) I have ATE Blue in the car now and ATE Gold in the pressure bleeder so I am able to tell when the hole system is flushed and it stopped without even seeing a drop of the gold fluid.

Whats the problem? Bad brake lines? Master Cylinder?

I need to get the pedal feel back! 95M3

I have no idea how to alleviate the problem, but have you tried bleeding the brakes using the friend to push the brake pedal.
If nothing else I would try that first.