The E36 M3 is a well engineered car that offers a great performance value.
It has a few weak points. If you have at least $15k to spend, you should be able to get a decent one with 80k or more miles. The water pump impeller should have been replaced, the radiator is plastic and leaks over time, the AC/heater can have problems,etc. None is a reason not to buy the car.
One does need to be careful when purchasing an M3, as there are salvage, flood, theft-recovery, etc., vehicles going around. You should have the car checked out by a reputable BMW mechanic and confirm history, etc.
You can tune a 95 to 270 hp fairly easily with a chip, exhaust, intake, etc. People take them to 500-600 hp. on occasion. Most don't exceed 400 hp with forced induction, 350 is typical for a 6psi supercharger. ($5000 or more plus install). A Chip (95) or software (96-99) run $250 and up. Nice exhausts can be had for $650, intakes $200 or so.
Also check out
http://www.bmwcca.org/links/lnkfset.shtml
www.turnermotorsport.com
www.dinan.com
www.hmsmotorsport.com