I just wonder if coilovers might be too hardcore for around town usage. Plus, buying a car designed for autoX significantly narrows your potential buyers when it's time to sell.
You can find driver condition E36 M3s for $8k, but you might have to travel for them. They will also have higher miles, which isn't really an issue if it's been well taken care of. E30 M3s actually seem to be appreciating in the last few years, but as you said it's hard to get much for less than the low teens. Another good bet would be an E34 M5. When well maintained they can be reliable cars, and you can find a nice driver in the $10k range. If you're set at $8k, that probably won't work either. All the M-cars share a number of parts with their lesser siblings, but you are correct in that M parts are expensive.
Cars that are easily in your price range are an E34 540 6-speed (really fun car), E36 325, 328, 318ti (fun with a swap or turbo/SC), E39 528i, E39 540 6-speed (good deals are out there), E46 323/325 (same car), 328. You can also pick up an early Z3. I would start by taking a good hard look at everything that falls into your price range and narrow down your choices. After you know what you want, you can more easily focus on finding a good deal.
BMWs are funny in that mileage isn't really that big of a deal. 100k is a big tipping point, as there's a lot of things that wear out around that mileage. Suspension bushings, shocks, and the cooling system are big ones. I'd rather have a 120k car with the major repairs done than an 80k car that is untouched.
I'll sell you my excellent condition '95 C36 AMG for $9k.
Better build quality than any of my BMWs, just as fast as an M3.
