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If you own an E36, you already know (or atleast I hope so) that your cooling system is extremely important. From the factory, there are some lacking features to the cooling system also.
The factory water pump came with a plastic impeller, which is known to grenade over time due to becoming brittle with age. A fix for this is by installing an impeller with a metal impeller instead. More plastic that brakes is the plastic thermostat housing. This is an easy fix with a replacement of the plastic unit with an aftermarket aluminum housing, which is readily available online. Another item, again plastic, is the mechanical cooling fan. These become brittle with age, and explode, taking out the radiator and other items under the hood. Unfortunately, I experienced the exploding fan issue myself. I would wish this upon no one. A popular fix is to perform a fan delete mod, which is removing the mechanical fan and replacing it with an electric fan. I did this, but slightly different.
For my version of the fan delete mod, I replaced the factory electric fan with a Volvo two speed fan, found in may different years of Volvo. Basically, if the fan uses the EXACT same blade mold as our factory BMW electric fan, it will work. Not only does it work, it pushes TONS more air, and it bolts right in place of the original fan! Other fan moldings were used as well, but if it looks like the factory fan, it will definitely work, and look factory after being installed. In addition to the fan install, a two speed fan relay had to be installed, which was pulled from the same Volvo. Even in swaps with other two speed fans, these relays are robust and work great! Wiring is fairly straightforward, and is shown in a diagram below, which was copied off the internet. A lower temperature fan switch was installed also, which was purchased here.
One issue after removing the mechanical fan, was there was no place to install the coolant overflow reservoir now that the factory fan shroud had been removed. I was not going to install a now-useless fan shroud just to hold the reservoir, so I came up with this little gem to hold the reservoir in place. We offer them in our store in both steel and aluminum. It holds it securely in place, and after many thousands of miles, it still works great. It mounts in place with two screws, which mount in two holes drilled by the customer. It can be located anywhere the customer sees fit on the back side of the radiator. The left and rightmost sides are more likely to be the best place to install, though, due to interference with the front of the motor.
To improve the reliability of the cooling system, a Mishimoto aluminum radiator and silicone hoses were installed. This should provide more cooling by the way of the aluminum radiator, and much more reliability with silicone hoses, and fully aluminum radiator. The factory plastic caps on the stock radiator leak and crack over time.