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I am more inclined to advise looking (at least) for a home meeting your need for additional space. You may be surprised what is available. However, if that does not pan out, take into consideration the extreme amount of dust, debris, lost time and aggravation that goes along with construction, especially if you have a spouse who will share decision making aspects of the project. You will be surprised to learn the two of you may disagree on fixtures, colors, textures, etc.Also, please hire a professional architect to make sure that your addition adds value to your home for resale purposes. A lot of people enclose porches and convert garages (sometimes without permits) and the entire expense is lost on resale because of basic design flaws.
Spend $55K (likely more, once you get into it) on a $100K house? Not likely. What are the other houses in the area like? Are they similar to what you have now, or are you the little-house-on-the-block?
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For Sale: $99,000
For Sale: $179,900
For Sale: $55,000