I plan on finishing my basement over the next few months. I have one wall that has a crack and allows some water in. The water runs down the wall and goes back under the slab (the concrete floor has a small gap between the wall and slab due to shrinkage).

My plan is to inject the crack with something, patch with hydrolic cement, and top off that section with Dry Loc. I dont think I will do the entire basement in Dry-loc just that section.

From there I will be topping with 2" XPS and was planning on leaving a 24" gap between the wall and the drywall. Can leaving this much cause any issues? I wanted to leave enough so I could keep an eye on that spot in the future to ensure no mold will be growing.

House is ~5 yrs old and should be done with major settling.