That would be a very difficult transplant into an e36. A lot of custom fabrication (engine mounts, oil pan, etc.), not to mention the steering linkage, headers, and wiring.
To be honest, I think your best bet is to go F/I for higher performance. There are some really good turbo kits around.
If you're really gung ho about the V8, there's an LS1 kit (those engines are around 3k each with tranny) or if you want to stick with bmw, the 4.6L from the X5 is very reliable and has a lot of power.