Funny enough there is no statutory holding period but longer is always better in this case.

There is no statutory holding period to qualify a property to start a 1031 Exchange, there is also no statutory holding period after a 1031 Exchange before you change the use.

Also, is it true that if the settlor dies prior to the fixed period ending, that the entire value of the property would be included in an estate tax?

Use an Option Contract InsteadIf you can’t show POF or make a strong offer:Sign an Option to Purchase agreement instead of a full purchase contract.This gives you the right (not obligation) to buy during a set timeframe.You can find a buyer during the option period and assign your option or do a double close. 

And You have to close on it by day 180 of the first sale (the first exchange period that will expire).In your situation it doesn't even have to be all or nothing. 

Of note: the New Orders Index contracted for the second month in a row following a three-month period of expansion.

The courts will protect the owner before you - the tax lien holder.You might be able to contact them about buying the property if they list the property for sale before the redemption period is up.

Then at the end of the 12 month period, I would purchase back the property at the same valuation ($350k) and the investor would get the initial $75k back in a lump sum after the transaction closes. 

I would be paying them monthly interest over a 5-7 year hold period, then look to refinance after that to get their money paid back.I look to buy these properties below market value and will add in capex, maintenance, vacancy, and property management costs to make sure there is still a small amount of cash flow after that. 

during the draw period (typically) you won't even be paying down principal unless you make extra payments.so unless you have cash i would wait.