Go to EC auto on 118 aveand about 89st. (477-1088)
they do great work and theres an old guy there (iforget his name) he used to race Bmw's like e21's,e30, and 2002's and he knows his stuff.
check out the stroker kit from IE. I bought several things from them for my old m20 and they know there shit and are very easy to do business with. click on e30 engine for the stroker kits.
I dont recomend the 3.2l kit if you plan on boosting it becausethe amount that you need to bore the cylinders to get that 3.2l's really makes the cylinder walls very thin and prone to failure under boost. NA its fine but not boosted. Feel free to give them a call, ask for Jeff, tell him what you are looking for and he will help you out.
BTW i'm not saying the M50 swap is bad. Im just saying that for the money you could build a 3.0l stroker M20 and have a new engine with more power for about the same $$$
Let me know if you want more info on any of the subjects discused so far, ill help you out. I did about 8-9 months of research on all of these options before i decided to go with the S50 so i can help you.