Not sure which exhaust the seta got. Is it duals all the way, or is there a merge to singe? Measure the diameter of the pipes coming off the manifold.
My budget stroker would walk stock m50's in an e30, but it wasn't just slapping the head on. I put a thinner gasket, ported and shaved the head down to the max, had an adjustable cam gear, custom exhaust etc. Sure it didn't cost me much, but have more resources than most. Wish I had gotten one more dyno run before the accident. Anyone who rode in or drove my car said it was an m20 freak as far as budget strokers go - and that was with the 2.93 third member.
It's a toss up on cost/time for modifying an m20 vs a swap. The m20 stuff bolts in, the m50 needs more stuff done to bolt it in.
To properly build an m20, sure, it's cheaper to swap. I have $2500 in the new m20 build just between parts and machining. 10.5:1 Ross pistons, HD rockers, balanced/blue printed rotating assembly, 284 cam with matching springs, custom valve job, all new gaskets/bearings/oil pump, decked/bored/honed block etc etc. All that for 200-ish WHP.
On the other hand, also building a proper forged s50 that has about $4k in parts and machining only. The gapless ring alone were $500, that block was align bored/decked/bored/honed/resized rod ends, balanced to 9k rpm, heavy valve springs, super lightweight lifters, custom valve job, 8.5:1 forged pistons, new bearings etc, ARP main/rod/head studs. Adds up fast.
Since we have been around a lot of Spec racers, you wouldn't believe the money spent on a stock m20 just to get 160whp. To the tune of $5k for a .020" over balanced/blue printed engine with all new valvetrain etc.
Wide Open Throttle Technologies (WOT-Tech)
The 1986 325es Delphin project LINK
Project 1988 325i sedan "Pinky" LINK