Live-In Spec Build - Tear Down and Rebuild

[AJ Smith]

I recently stumbled upon an extremely run down home (foundation, roof, siding, mold, etc.) single family home on a nice lot in a high end neighborhood. At first glance, it appears the current home may be beyond repair / it would be better to just tear it down and rebuild. This is not my first deal, I am a moderately experienced investor ($2M in assets portfolio of buy and hold) and have taken on some major rehabs in the past so i feel as though i have a solid grasp on the basics (numbers, financing, permits, working with contractors etc.) I would like to live in the property for two years then sell in order to capture the tax benefits. 

I know that live-in flips are a popular strategy but i am wondering if anyone has experience/advice on building a spec home, living in it for two years, and selling. Curious about cost PSF to build (thinking a high-end, ~5,000 sq ft, 5 bed, 5 bath home), best practices for finding a builder, working with the city, writing off building / rehab costs from a tax perspective while living in the home, etc. 

Any thoughts / opinions / comments would be greatly appreciated!