So we found a property that had great potential for a value add option by building out the attic and adding 2 bedrooms, a bathroom/laundry room and a loft that would increase the square footage by 800 square feet.

It sounds from your description that it is.However, because you also do personal activities in the room (play games on your desktop), it doesn't sound like this would pass the "exclusive use" rule.Playing the games on your laptop in a different room would likely qualify the room as "exclusive use" as a home office.Also note that in the future if you take this deduction, there is a simplified method you can use to reduce the records you have to keep - just multiply the square footage of the office by $5 (if it is under 300 total square feet).

It wasn't a bad outcome though, because I was able to add bedrooms and square footage to the 2nd floor apartment...and charge a commensurate rent.I mention all that to suggest you should check with the town's zoning board and see if you can determine the likelihood of getting the property rezoned. 

The issues that I'm having is that there is not enough examples in certain areas on craigslist and rentometer doesn't take into account for square footage of the units when comparing rent prices.

These are the big-ticket items that can destroy the budget. otherwise, I know what finishes I want to use so I can estimate the square footage based off where the materials would go.

I have found a 2-1 property listed at 160k in great shape with an unfinished basement, and comps of 4-2 with the same square footage of the finished house have sold for 200k-220k in that area.

The analysis is similar to typical rental property analysis, but they offer the ability to enter the unit mix and rent/square footage in more details.

I’m planning on adding square footage and several bathrooms.Once the construction is complete the refinance mortgage will be 88% of the future value of the home.

We always try to add square footage to our projects somehow.Let us know how you get on.

The main problem was that there are no comps in the area that match the sq. footage of the house so we weren't really able to estimate a good ARV.