Return on an Addition

[George Seybolt]

So I was doing some research on the value add of an addition and was wondering if I'm missing something. Was looking at adding a ~400 sqft addition to a 2 bed 1 bath to make it a 3 bed 2 bath (it's a second floor addition and the bath would be directly above another, so not a crazy amount of plumbing). From what I can see it would cost ~$175-250/sqft (not an actual quote, just what I've gleamed from average addition data for MA), and the area sells for around $350-450/sqft (think suburb inside the 495 belt). As the saying goes there's no free lunch so I'm wondering if I'm missing something, as this seems way to straightforward a way to add 40-80k equity without even having to DIY and put in sweat equity. Obviously there's always a risk you don't get permitted, but my understanding is it's not usually an issue, so just trying to figure out if I'm missing something?

i.e. are my cost projections way off, is it much harder to permit than I thought, etc? Any feedback would be appreciated, thanks!