I understand that this is a general rule of thumb when determining a properties feasibility but the 50% that gets carved off ultimately does get exercised during tenant occupation, correct?

If this property has an ARV of $110k and you need to put $30k worth of rehabs into the property then you will probably loss money of you buy it for $59k.  

I would love to get started before we make the move but don't know if it is feasible or not.

This happened back when I was first starting out buying probate properties, and was in a state that does not have the 90% rule; the price was about 65% of appraisal value - a significant loss of profit and huge legal fees to correct.

Once its on paper, you will have a greater understanding of what you can gain and what will be your loss.

If I would have known what I know now I would have just cut my losses and took the proceeds to buy a rental.  

Then FHA took a beating on losses.

One small bright spot, well not really that bright, is once you're deemed to be in the biz of flipping homes, if you happen to lose on one of them, you can treat that as a loss and count it against your income, which you cannot do with a capital loss. 

But that may not be as feasible from a distance.

Did you include your investment property on your schedule E and if you did did you claim a loss?