Mate of mine is thinking of building an E36 track car. So, what engine is to be used is causing us headaches though.

He has an SR20DET that he could possibly use, and most of a YB, but we started looking at more or less everything. Thought about an RB25DET, C20LET, Supra TT engine etc. He would like a V8 so we thought Rover V8, small block chevy, LS1, Windsor V8. The ultimate would have to be an S62 (E39 M5) engine, though with it having fly by wire throttle, and how complex it is, it would probably be easiest to chop a whole, working M5, just not worth it. Also heard that they are very expensive to tune? (not that 400bhp is pony)

Searched around and spoke to Chip (cheers for the advice buddy) and he pointed us to the 1UZFE Lexus V8! Very cheap to get hold of, easy to tune, and around 280bhp with filter + exhaust. Plus they sound fucking awesome!
Thing is, that would probably need to be forced induction of some sort to be up into 400+bhp territory so it adds to the cost, and also infringes on the space in the bay.

We've come full circle and thought again about an E36 M3 evo engine. 320bhp, slight weight penalty over the 1UZ but great engine, and best of all, bolts straight in.

Then we thought about the E46 M3 engine. 350bhp, sorted. Anyone any gen on the fitment of them into E36's? Or are they hugely expensive?

Ideally, he wants an S62 V8, but its just not worth the money.

Any suggestions would be great, and tuning options for each engine please