Some info:Original property purchase price ~$90k100% cash purchaseLooking to put the proceeds of the sale into escrow account (1031) and use it for a down payment to purchase another property of greater value (say we get $110k from the sale, so we can look for up to $380-400k approx. @25% down payment)Does anyone have any contacts to help facilitate a 1031 in NY?

If you proceed with the project, you should go through the proper permitting process.

I would like to get your thoughts/advice on how to proceed so that I can use the collective wisdom to find the best path forward.

Along  the way we sold of several properties we liked the least - mostly due to location and used those proceeds to pay down our highest mortgages on other properties.  

 @Ryan Yu  To defer all tax you must purchase at least as much as your net sale, and use all of the proceeds in your exchange.

So, I am thinking selling the house will be the better option for my sister, myself and they still have smaller house to live together once they use the proceed to down for a small home and hopefully they can refinance next year or so when the interest is lower. 

(this whole sale where you see the proceeds pictured above, was I realized I had to get more liquid and retool my balance sheet for long term growth. 

If I proceed with adding one unit, around 1500 sqft, the construction and approval costs may amount to approximately $450K, which would bring the total property value to around $1.35 million.Given that some three-unit properties in Canton have sold for less than $1 million in the last two years, I'm uncertain whether adding this one unit and renting it out would be a wise investment.My questions are:Is adding a single unit worth the investment considering the current market trends in Canton, MA?

When they think you probably won't get approved, they still proceed and hope the underwriter will be okay with it.

The title insurance would be paid out of the proceeds you wire to title.