. - 2 story house with very small rooms and and 2 steps down, imminently as you enter the front door.- Gated community and in a reasonable HOA. - The home is 2 payments behind and already got a letter from the lender about future foreclose.

I bought a house last week and am selling a house next week, but I don't know how many doors I have today, unless I effort a count. 

There isn't enough information in here about the current state of the house to be able to advise you, but I would think #3 is a definite no as it seems unnecessary from a cost perspective although that market has scale to accept it.

Buy 1 or 2  house close to your home or at least someone what close depending on numbers. 

Are there any  other effective  platform to list  the house for that purpose ? 

I actually like brush strokes in old houses as well.

If you are house hacking ask about house hacking, OOS ask about OOS, etc. etc.

Buy a large house, or a duplex, triplex, fourplex.

If I had to guess I would say your money could “develop” 1-2 houses in Staten Island but in the right market you could easily get up to 12 or possibly more good units fully paid for.

We also had the option of another type of policy that was even less expensive that would have required us to spend at least 1 night in the house and rent it at least 30 nights each year.