ah the 535.... i had the more advanced, faster replacement the E34 540i Touring....not very economical with 530i manual tranny which lacks the 6th gear...i also had a 633csi with a swapped 92 535i engine...basically your engine.
anywho...the 535i M30 engine is an antique...SOHC 8V with primitive "flapper door" fuel metering...
jank that out and drop in the 3.2L M3 engine out of an e36....