As I have said I do not want to deal with regulatory agencys for all the permits. You know as well as I that they are a nightmare to deal with.
>The buyers have to put more down and do not have the money for renovations.
I know this and my two small bedroom or one large configuration convertable back to two, totally remodled (window, doors, siding, insulation, sheetrock, bathroom, kitchen) will be perfect for a new couple just starting out or retired couple not wanting to move from NY. Maybe even professors looking for a short commute with the semi privacy of the cul de sac.
There is also 1/3 less homes available now than there was last year. There are also less buyers because of the stricter credit regulations. The buyers have to put more down and do not have the money for renovations.
A one or two bedroom home is not an easy sale. Can you make it a colonial and put on a second floor, and still keep it affordable?
"Build It and they will come" is very risky strategy in the current climate. Don't do it. Now is the time to batten down the hatches and weather the storm, which may last for a couple of years or more. Without knowing much about your circumstances, it sound to me like you would do better to clean it up as best you can and rent to Dowling College students, so that at least you can cover the taxes and insurance. Then revisit the long term renovation plans in a couple of years time when things have settled down.
I just don't want to start applying for all the permits to expand.
They all think they are doing you a big favor when it is their job.