1031 Exchange Into Empty Lots

[Joe Splitrock]

I have a property worth around $250K that I paid $104K for. I am considering selling the property and doing a 1031 exchange. I am interested in using the proceeds to buy land, which I will then get a construction loan to build on. I have two options. The first option is buy three twin home lots that each cost $80K. The other option is a larger chunk of land that costs around $300K on which I would built townhomes. Is it a problem using the proceeds to buy land, then building investment properties on that land? I plan to hold the properties for many years after building.

@Dave Foster I know this is softball question for a guy like you. Any pitfalls or conditions I need to meet to justify it being held for investment?