My "other" car is also a BMW. It's a 1985 3 series(e30) with a 1998 2.8 liter twin cam engine(m52)transplanted. Its an absolute BLAST to drive this car, good power and awesome handling. I have a m50 intake(bigger diameter runners)and pair of Schrick cams waiting to go in also.
Engines are pretty much bulletproof, but do watch the timing belt replacement intervals. Mine has a chain - no worries.