1031 Exchange to Myself

[Kyle Carson]

I currently have a rental property that I am looking to do a 1031 exchange with. I found a property that has a house on it and believe the lot is big enough to split into two. I am curious about the legalities of buying the new property outside of the exchange, dividing the property and buying the empty lot with the exchange. Is there any way to do this? If I buy it through a trust or LLC does that work?

The reason I want to do this is because I would want to build on the empty lot but am not sure if I would be able to complete the build in the required 180 days.  I would sell the exchange property for $420K and buy the empty lot through the exchange for $200K and take out a building loan for $220K.

If I own the property first I can make the first two months of improvements (site prep, utilities, permits, and foundation) before I sell it to myself through the exchange and make sure it is done by the end of the 180 day clock. 

Does this make sense?