IMO they are the worst MR2 however they are still great.
If you want to do an engine swap and want something unique/different swap do in a 3SGE n/a engine. They had some with something around 200hp (called BEAMS) with room to build on which would be very fun in that car.
If I were doing any serious MR2 build I would go 1st or 3rd gen. If I wanted reliability I would go 1st and 3rd gen. If I wanted cheap I would go 1st and 3rd gen. If I wanted an extremely serious build with a built engine and turbo I would go 1st and 3rd gen. (2ZZGE >>>>>>>>>> 3SGE)
You can pick up a clean MK1 for around $2000. You can get MS PNP, pick up a 4AGZE, GT28Rs (or GT2871/74) turbo, manifold/downpipe on matrix garage, air-water intercooler setup from frozenboost, download the base tune from mspnp's site, drive it to tuner, get it tuned for a VERY easymode build to get ~300whp. This can be done+cost of car and if you get a take off turbo from like a pulsar gtir or silva for ~$5000. New turbo would be more.
If you don't want a build you can pick up a MK3 (which weighs ~300-400 lbs less than MK1 and has 30 more hp) for ~$5000 or a 2ZZ 180-190hp car for ~6000-8000. Swapped cars are ridiculously common. If you want a turbo build numerous turbo kits are made for this car. For the 2ZZ a supercharger kit exists on the spyderchat forums for sale that produces around 300whp. If you go for a built 2zz you can get anything you want within reason really, it flows ridiculously well all you need is lower compression forged pistons. Really with just a inexpensive 2ZZ swaped car you have a $6000 lotus elise fighter and that's all he would really want right there. I would go that route.
This is all assuming he doesn't have fabrication skills and just wants to buy E36 M3 already made.
I can give more details on MK2, i mean it's turbo already, typically abused, can put in a CT26+piggyback for cheap.... but why? If you want a clean car it's going to be more than either of the other two, probably triple the cost of a MK1 at which point with the price difference you can do a mega build. If you buy a cheap car it will be unreliable garbage and a PITA. AW11 and W30 are better handling lighter chassis.
I don't see at all the point of going MK2. It's like going DSM when cheap WRXs exist. No point. Serious build, MK1. Plug and play track car, MK3.
Avoid an AW11 Mr2 Supercharged. No easy ecu solution. NLA rear axles. Unique transmission. Only get that car if you are keeping it stock or can build your own megasquirt. You would also need to transfer over a bunch of stuff from a NA car to the SC in order to do a turbo install. The supercharger has 0 room for upgrade and is also NLA. The only upgrade is a previa supercharger with offers little improvement and requires fabrication. At that point your better off going for a turbo.
Another thing with a NA MK1 is you can use a WIDE variety of transmissions from FWD cars in it including some 6 speeds. The car is like legos with near infinite easy options for a build.