[bigjae1976]

First, I would fix the motor. Selling an M3 with a blown motor makes them close to worthless. You're looking at getting about $10k at the high end? It's not just the cost of the motor but there are other implied things like...not well maintained. That assumption tanks the value of any BMW and more so for an M car.

Rod knock...new crank and rods. Probably worth rebuilding since S65s are still $7k to $9k. Unlike an S54, cheaper to just throw in a used motor.

In case you're shopping around, be aware that the crank is surface is heat treated. Once you spin the bearing and wear the surface, you have to re-heat treat the crank or it won't last very long. I haven't priced S65 cranks but I was quoted $1000 to grind and heat treat the crank. At that point, might as well get a new crank.

BMW sells undersize bearings but it's to account for wear, not "I didn't spin my bearing that bad". Went through that already.