1031 into Construction on Existing Property?

[Patrick Mason]

 I am working on a deal with an investor to develop a piece of property that he owns. The property is dirt, no structures, and he wants to put multifamily units on it. Our question is can he sell two SFHs and 1031 into the improvement of the property he already owns. The sale of the two SFHs would be used to cover construction costs on the MFH however it is not a new purchase since he already owns the property. Thoughts?  

Thank You!