It all depends on what you want your final outcome to be. A M3 is a nice start and can be made to run faster, but mods are twice the price. The interior and exterior are nicer on the M3. There are guys on bimmerforums with E36 cars running low 10's. I've done turbo and s/c setups on the 328is, 325i, and M52 swaps into 318ti cars.
If you are to look for a specific year E36, I'd go with a 1998 328is with a 5 speed. That car is amazingly fast from the factory. You may just want to put upgraded software and a cold air intake on it and call it a day. Feel free to pm me with any questions and I'll try to help as best I can
Dave
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450hp 1987 Fiero GT, 1986 Fiero SE, certified master technician/shop owner
www.njautobahn.com