you should part it out.
realistically, you'll probably get something in the low 40s for it.
As difficult as it is to accept, he's completely right. The modified car market is very small, and all modders know you never get back what money you put in. The average rate is about 1/3 the value. If you drop the car off to a dealer, if you are lucky they will give you blue book value for the car but many will try to take advantage and cite potential warranty issues or damage caused by parts that weren't BMW OEM, etc.
However, it is certainly in your best interest to get every penny out of it, so I would try eBay & AutoTrader and set the value near what you put in... because you never know, you may just find the guy who is in the market for a car and planned similar mods... it will save him time & money and help you recoup some of your expenditures.
The problem with part-out, is you have to pay wrench time (or do it yourself) to return the car to stock... only to sell used mods which typically go for 1/3 to 1/2 their retail value.... but, the market for parts is larger and easier than for that of a modified car (because people have such varied tastes and modification plans).
At any rate, best of luck! Post up some pics and let us know if you decide to part out... we'll let our friends know about it and help you get the word out. Especially since you are a relatively short commute from the North East / Mid Atlantic region.