I don't have kids, but I tried to do as you are saying... and things took a little longer than expected...
I didn't have countertops for 3 weeks, my only sink was in the bathroom, and my only shower was in the other bathroom... and I used roofing paper as a shower curtain for a few days before my door came in.
It was super stressful. After that it was fine because I finished a few rooms really quick and they were my "real person" rooms I could go in and not feel like I was camping. My advice would be to set aside quiet places and give yourself a buffer to make sure your creature comforts are completed before you move in. My lease was up and I didn't have a choice.
It's all going to take longer than you expect. It's hard to be ambitious about remodeling when it's your house and you've got the option to put it off.
I’ve done it 3 times but since it’s your primary residence I would hesitate to call it a flip. Reason being is that it always takes much longer when you live in it and costs much more because you tend to put personal touches in that you wouldn’t do if you it was just a true flip.
Having very young kids at home just makes it harder.
That being said, it can still be a good investment too. I’ve made more money on the houses I lived in then on any pure investment property but that’s time playing a bigger part more then anything else even though I always bought the ugliest house in the nicest neighborhood.
Think of this; once you are done, are you willing to pack up and uproot your kids to the next property? People who hack it don’t always consider the cost of moving. Plus, you’ll be in a potentially stressful position to find a new house once yours sells.
I am in the same situation right now. We are set to close in 2 weeks. Kind of scary but i think we're ready.
I'm going to hang out and catch some more advice.
Also what is your financing situation looking like? One loan for to finance mortgage and construction or are you doing multiple loans?
And do you plan to refinance after the renovations?