If I were in the market I think I'd go for a drop in autosear instead of a full M16 that way you could put it in multiple guns..
When I was in vegas I rented a full auto M16 with a sound suppressor. It was unbelievably awesome and made me sad to go home and shoot my lowly AR-15.
Drop in sears almost always suck, and cost almost as much as a Pre-86 form-4 M16 lower.
Also "class 3" is not the correct term when referring to machine guns. Class 3 is what a SOT has to be in order to posses post-86 machine guns. A pre-86 machine gun is no different than any other NFA item, it's not in a different class, and it's the same stamp as a suppressor, destructive device, or short barreled rifle/shotgun.
What happened in 1986 is the BATFE stopped taking new Form-1's allowing people to register new machine guns as NFA items as part of the Gun Owners Protection act. All machine guns legally owned were already registered with the BATFE as a NFA item and a $200 tax stamp was paid at the time of transfer or manufacture. Only registered guns can be transfered on a Form 4, unless you're a class 3 SOT (special occupations taxpayer), in which case you can have a post-86 machine gun be transfered to you on a Form 3 with no tax but with a demo letter from a local police department.
Personally I figured that it was less expensive to get a FFL and SOT so I could legally make some of the machine guns I was interested in at a greatly reduced cost to what it would cost me to purchase one. A F4 German MG42 is good condition is about $22,000, yet the cost to get a business started is about $6,000 plus about $700 in yearly taxes for the FFL and SOT. Cost of the kit and parts is about $900. This comes with several disadvantages such as a loss of privacy at the business location and increased storage restrictions, but with the gain of many advantages such as being able to make, purchase and transfer post-86 machine guns and other NFA items at reduced cost and without paying transfer taxes.