You might want to start targeting a size you can take to the top div. Then you can use the rest of the money on players to get there. I think the current wisdom is
15000 bleachers
4500 lower tier
500 courtside
50 luxury boxes
That's been my plan. But I just relegated to div 4 with an 18000 seat arena. Hoping to bounce to div 3 or even 2 in the next 3-4 seasons.
You should just expand a little at a time. Around 100-500 seats at a time should be fine. As long as you have the cash, there should be no time when you arena isn't under construction