In theory, it's a good plan.
You invest money making a product, hold onto it for 2 years to minimize taxes, then sell at a hefty profit of 25%. Did I get that right?
If so, here's where it could go wrong. I'm not going to list these issues to discourage you. Instead, I want to give you food for thought. That way, you can make plans to mitigate the issues (or decide the risk is higher than your tolerance for it). Either way, it's a win.
1) The house doesn't cost $600,000 to build. It costs $750,000 to build. Cost overruns are endemic to the home construction industry. Do you know how to manage such a large project to keep costs and timelines to the plan?
2) If the costs go too high, can you handle it? P&I for $600,000 loan, 5% down, 4% rate, will run you ~$2722 a month. Plus taxes and insurance and utilities. Can you handle that burn rate on your cash for an additional 12 months if the project timeline runs over?
3) How about if the housing market tumbles when you want to sell? Can you handle the monthly costs for an extra year or five?
4) Do you already have a list of quality construction teams (framers, roofers, hvac, plumbers, electricians, etc.) or are you just hoping they will all do a quality, on-time job. Remember, the construction flaws that a $120,000 home buyer will ignore may mean the difference between getting the price you want or even selling at all. You may have to pay to have something done twice - actually once, removed, then done again, which is even more expensive. (Yes, the contractor *should* fix it at their cost. What happens if they won't or can't?
5) Do you know the exact rules for getting the owner-occupied tax break on selling? (I don't.) Does the timeline include construction time or just time living in the house? It could mean the difference between carrying the costs of the house for 2 years versus 3.
6) Will you be doing a FSBO (For Sale By Owner)? If so, do you know how? How to stage a house to get a better price? If not, do you already have a realtor you know is good at selling homes? In most sales professions, 80% of the sales are done by 20% of the sales people, so the right agent can really make a difference.
7) Do you know that the features and style of the home you will be building are popular enough to get a large number of potential buyers who are both willing and able to pay for it? What some folks think is great can be really quirky to others.
Hope that will give you some ideas to work out.