Hello Laura, Different lenders might require different things here but most of the time if you can show the lender a signed one year lease agreement that will be sufficient.

You seem to think that JADU's owner-occupancy requirement is a dead end.

However, it's important to ensure that all requirements for a valid 1031 exchange are met, including identifying replacement property within 45 days of the sale and completing the exchange within 180 days.I would suggest you get with a real estate focused accountant asap to take care of this.

The IRS requires that you use the unrelated 3rd party qualified intermediary. 

We should be able to pay cash for the entire build given the timeline the build will require.

As others have said, these are typical land bank purchases where you buy a house and land and are required to do the renovation and it's always $100-$200k if they are offered from $1 - $5,000.

If you do cash out refinance it would allow to only get to 75% LTV around the high 7s with some points, they would still require to be 1st position.

The title company gave me the contact of a firm they partner with, and requested that we use them instead as they meet their requirements, but they could not provide any explanation of why they can't write the check to the IRS, and I have already paid for the other firm's services and do not want to pay again.

Just requires a lot more cash up front and having it held up for a few years.

They seem to require high quality materials and  craftsmanship to maintain a level surface.