I would not say that you will ALWAYS get a value increase with the change.Second, the type of renovations you want will require you to pull an ALT-1 Permit: Permit's in NYCHowever, Jillian can confirm that.It is possible that a full tax re-assessment of your building will trigger paying higher taxes, which will blunt your calculated cash flow.If you were not changing the Certificate of Occupancy, I would not have mentioned a tax re-assessment.Those are a few things to think about and make sure you don't wind up spending a lot of money to make a change in the CofO only to wind up having the same Property Value AND having your potential income source blunted by increased property tax.

What it is now is acquiring the land for $25M plus $2M if further site work to get building permit and ready for construction for Phase 1.

Otherwise you would need to apply for a Personal Line of Credit - and those aren't permitted to be used in this fashion for traditional lendingDo shell properties have value - I guess.  

Do I need a permit to build up the half wall overlooking the downstairs and adding a door?

A really cheap property that needs a lot of rehab has to be managed.You also need experience rehabbing,Material shopping, permits, managing sub contractors, order of operations, managing payments, checking work, and accurately projecting all of those numbers in the first place to make sure you get a good deal.Best bet is to buy more of a turn key rental for your first purchase.

The actual cutting , not including permitting ect....

I wanted to post bandit signs but I see that is an issue around here due to needing permits. 

I would be surprised if someone ever pulled permits for that basement unit.

When you sold the property as entitled am I correct in assuming that the permit was for the drawings you produced?

Developing drawings, getting approval from city/county, permits approval, bids for getting all utilities on site and then constructing it.