it will be expensive...and to be honest with you, its not that different than a honda...an engine is an engine and a suspension is a suspension. Look into a Bentley manual if you are planning on this yourself. That is a very cheap price though and if you think you have the time and assets to make everything back into pristine condition, then go for it. A lot of people think that building BMWs from the ground up as a project car isn't worth it because it can get VERY expensive. By the time you restore everything, you could end up spending upwards of $10k including parts/labor/beer/etc. And for only 7 or 8k, you can go out and buy a 325i or something in great condition with about 100k miles on the clock. And it will still run forever.
But if you are into it, go for it. Its significantly a more expesive hobby for BMWs than as with a Honda...but you have a great start with finding your base for only $1600 and a bullet proof engine for that good of a price. Make sure you know what you are getting in that engine because it sure seems suspiciously cheap for a BMW engine of any sorts...
for reference, go to
bavengine.com
goodluck and

dude!!!
ps-why did you bump yourself after a minute??? hahahaha