Hello, I currently have an empty space (about 12 feet from the property to the sidewalk and 8+ feet wide).

I currently have a three bedroom with no garage or basement on a very small lot.

But keep in mind if your using money you cant afford to get back then buying action property might not be appropriate for your current endeavors and its better to just buy open market were you can do proper due diligence and know you have a build-able site.

What are your goals, what is your current living situation, and where do you live?

These currently aren't fancy units. - Value add - When building additional units, what steps should be taken to determine how many can be built? 

I appreciate the tip about the current market conditions.

Adding the current mortgage and utilities would be roughly $1,350 resulting in a profit of $650/mo.

Recently I've had 2 guests that were messy and accessed the two rooms that weren't currently rented.

There are situations where it is more beneficial to end the current lease and start a new one (ability to change lease terms, rent amount etc), and there are situations where it makes more sense to just do an addendum.

I am currently enjoying my 1k monthly income with no debt, and I am nervous about leveraging.