@Mathew Burnett , First we've got to start with the actual holding period - there isnt a statutory holding period that qualifies your property as investment and eligible for a 1031. The standard is your intent. If your intent was to hold the property for productive investment use then it qualifies for a 1031. Most folks feel comfortable at any period more than a year. The mantra in the industry used to be "one year and one day". But there could always be situations where a shorter or longer hold period is appropriate. It's all about your intent and how you can demonstrate that intent.
Now enter the reverse exchange. There's some issues with your scenario
1. You can't have owned the vacant lot for a year. You cannot 1031 into property you already own. In order to do a reverse exchange the QI has to take title to the lot you want to build on before you do. That way that lot still qualifies for you to sell your old property and purchase the lot now with a . house on it to complete your 1031 exchange. That's the reverse part. It's like you purchase your new property first but you really don't. You just control it so you can build on it.
2. When you build on that lot you are changing the nature of the property from vacant land to a structure. So you must demonstrate your intent as it is to the new construction. If you complete it and immediately sell and 1031 again why did you build that house - did you do it to hold or primarily for resale? Hard to say isn't it. So what you really must do is get the property built. Then establish your intent to hold that new construction (again a year feels pretty good). And then you could sell and 1031.
the order of a reverse construction exchange will be
1. QI takes title to the lot.
2. You build on the lot (no more than 180 days from the day the QI takes title to the lot)
3. You sell your old property
4. You buy the lot and construction from the QI to complete the exchange. (again no more than 180 days from the day the QI takes title to the lot).
If you followed those steps and then immediately sold the new house what was your intent when you did the process - to build a house to hold?? Or to build a house to sell. It's hard to establish and defend an intent on a very short holding period of new construction unless you have something like an unsolicited offer to sell. That's kind of the gold standard. You weren't going to sell. Your intent was to hold. But someone made you an offer you couldn't refuse.