need to verify a domain set up for multisite

I am getting ready to set up a new multisite on a new vps account hosted by Bluehost. We have asked this same question of Bluehost and gotten an affirmative response. But, before I act, I wanted to run it by you.

We opened the account with the domain name that we want to use and that is currently home of an active ecommerce site - a single site. Example name: existingsite.com

In order to protect the existing site while we build the new one, can we create a subdomain like test.existingsite.com to build the new multisite? And then when ready to make the switch, we point the existing dns to the new server and assign or map it to the subdomain? Keep in mind, when all is said and done, I want the new multisite and primary site domain to be existingsite.com

If so, what problems do you foresee that I need to be aware of before I start the configuration, site build. For example, I want the multisite to be a subdirectory format. Thanks in advance for your help on this one! Linda @iempoweru