Like someone else stated, get the BMW chipped and get a full coil-over suspension. I would also add an exhaust, but that's just me. After all that you may be looking at $4-$5k.
You also could go the route of just getting a used e46 M3($16k-$40k) and blow away the 335.
BTW, I love the 370 and am not trying to knock it, just posting the obvious options.
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