Rent, Raze, then Build Primary Residence?

[Katherine S.]

Hubby and I have had our eye on a property that is in our ideal location for our retirement, but is unsuitable for me to live in because of my wheelchair.  It's been on and off the market for a couple years, and they've just dropped the price again.  

There is also an adjacent vacant lot that we tried to buy last year, but discovered it would require a very expensive foundation.  That seller refused to adjust their price to reflect the unexpected costs, so we walked.

We've started talking about possibly purchasing the property with the house and renting it out for a few years before knocking it down and building our personal residence.  Hopefully, by the time we did that, we could come to an agreement with the owner of the vacant lot and combine the two parcels.  

Is it even possible to do something like this?  Legally, tax wise, mortgage wise?  Is there a better way?  (We can't buy it outright and build right now because we've jumped into the rental portfolio business.)