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Well I have saved up about $2000 to drop into my 88 L98 A4. The first thing that I would like to do is put a nice lopey cam into it, and probably RR's. I really dont have a great idea how much this type of thing costs. Is it realistic that I could get a new cam and 1.6 RR's for 2k installed? Also, what kind of HP gain could one expect from those two mods?
Are you going to do more mods in the future? I don't know if you would gain a ton because the stock intake and exhaust is pretty bad and would limit the effectiveness of the cam. Someone else can chime in with a HP number.
Valve train parts can open a can of worms. If you put rockers on it's best to change the springs and valve seals. You cannot run a big cam without changing the springs. Putting a new cam in, a new timing chain would be good, possibly dampner to. You would need new lifters with a new cam, those are pricey.
Just the rocker upgrade would be OK then switch to exhaust or intake. There have recently been many threads on the rockers, run a search.
You could get your heads professionally porterd along with a custom cam for under $2k but that doesn't include labor and many other parts that will probably be needed along the way. I started adding up parts for my heads and cam install and got over $4k and still adding. That's not including that forged bottom end that I really want. As usual, I'm probably going overboard on a few things. I'm buying a piece at a time. By the time I have everything I may be ready for a new engine anyways. You could get a complete nitrous system for under $2k installed. That would be the most hp for your $. Like the others suggested you may want to start with the exhaust and headers though.