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|3-Series (E36) Chat relating to the BMW 3-Series from 1992-1999. Autodoodad Specific models include: BMW 316i, BMW 318i, BMW 318iS/ti, BMW 320, BMW 323, BMW 320, BMW 324, BMW 325, BMW 328.|
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Honestly, if you plan on doing a engine swap, rear end, suspension and brake work, you might as well sell the 318 and buy a M3.
You'll avoid the work, it's probably going to cost less and you'll have a actual M3 in the end (which is going to be worth more no matter how nice the swapped 318 is).
I know you want to do work and to make the car into something personal and unique, but really, a M3 is a better starting point whichever way you look at it.
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