NO to auction
Agree with az34. Mike Miller also recommends private sale. Any E36 at an auction is going to be rough. I know, I work at an auction. Forget "saving" money for mods-buy the best damn car you can. If you do, you won't have to spend a bundle on it to get it up to spec. E36 M3's in the Roundel are minimum $9K but that will get a well looked after car. I remember seeing the 3 and 4 year old lease returns come into auction. DEFINITELY not looked after: dirty, curb rash, oil as black as soot-really ugly.