Creative 1031 or bad idea?

[Steve Rory]

Hi All-

I have a single-family house with $170k in equity.

We want to build a cottage and thinking of starting the process. The cottage land is owned by one family member who would gift the land. The other family member would be my partner in the cottage build. 

Can I 1031 the money into the cottage build?

With a build, once we closed on selling investment house, we'd have 180 days to sign the dotted line with builder?

I'd rather not put all the money cash into the build, but split and use some to buy more rentals.

Would like to do this, this cottage is the dream. So any suggestions or thoughts, I'm all ears! 

Assumptions:

-our contribution to the cottage would be more than the selling price of the investment property. 

-the cottage's primary purpose would be for investment (we'd stay in the cottage less than 10% of the time, as per IRS rules).

Thanks everyone!

Best,

Steve