Living in a business investment property

[Eric Shore]

I have owned a single-family residence for the past 16 years and rented it out for the fist 11 years. 5 years ago, as a business investment, I decided to tear down the property and build a new home for sale at a profit. During the 5 year period, to minimize costs, I terminated its rental, sold my residence and moved into it. 1 1/2 years ago I finally selected an architect and had plans drawn up. The plans have been approved and permitted by the city. I am now in escrow on my new residence so I can move in order to begin construction. However, now my attempt to acquire funding on the project has been unsuccessful. If, instead of doing the construction project myself, I sell the property with its plans and permits, will the property qualify for a 1031 exchange, even though I have lived in it for the past 5 years? If not, how long a time must I wait before selling the property.