Three Big People in a House Built for Elves

Please excuse the mess......I live in a 1950's pre-fab with my two children. They are a boy and a girl ages 7 and 9 and they have to share a bedroom that measures 8ft by 10ft!! It's so small that I couldn't even back up far enough to take a decent picture! There is a carport at the front of the house, and a teeny attatched laundry room, with for some odd reason has a door going into the kids bedroom. The door is unusable, since that's the only place to put the kids beds. My idea is to expand the existing bedroom to include the laundry room, and then enclose the carport to make a second bedroom. My kids are at the age where it is very close to inappropriate for them to be sleeping in the same room. I know $1,000 won't cover it, but it would sure help!!