Step 2: The lower part
Measure the circumference of your chest.
Cut a piece of elastic that matches your measurements.
Turn the shirt inside out and cut a small opening on the bottom hem.
Use a safety pin to attach one end of the elastic and insert the pin through the small opening. Pass the safety pin (and the elastic) inside the hem until you reach the other end.
Attach the two ends of the elastic by sewing them.
Turn the shirt right side out. Now it should look like the picture.