I bought another house in a neighborhood in durham (duke homestead) that goes for about 210/sqft. It has about 1050sqft. It's currently gutted with a 3/1. Im trying to figure out my layout now. I could add another 100sqft (at probably 120-150/sqft)

Two of the bedrooms are pretty small like 9x10s. 

So, my options are that i could turn it into a:

1- 2/2 (with a spacious master closet and bathroom)

2- leave it as a 3/1

3- make it into a tight 3/2 (with small closets)

3- do an addition to make it into a still fairly tight 3/2 (around 1150sqft). 

Definitely get a second bathroom in there, hard to say on the rest without knowing cost of addition.  Look at what else has been selling in that area....   you’ll find your answer there. 

The easy answer would be to add an addition to make is a 3/2 with a master suite but hard to know if that actually make sense numbers wise.  At minimum you need to add a second bathroom.  The local market should be able to tell you what you need in order to reach a desired price point.