hello had my second at home in a flat with the 3.5 yo DD with me and DH. fabulous experience for us all (she still talks about it and is now 16yo). 1st time labour was 15 hours, full on hospital, medical intervention, second time, calm home birth a bit of gas and air at the end and 2.5 hours. and he was 9 pounds. you never know how it's gonna be!
we prepped DD a lot - talking about it all and explaining that it hurt and that I'd make funny noises, and that it was OK. I ended up sitting on a birthing ball, doing 'row the boat' with her so I could rock back and forth , holding her hands. then we had competitions to see who could make funniest noises during contractions. It was a lovely distraction , kept me calm and added to the fun and experience of it all.
my best mate was on standby to come and be with her during labour just in case I needed to go to hospital or things got too tricky or took ages. In the end said mate arrived 15mins after the birth as it was so fast (the midwife got there 7 minutes beforehand....).
I don't think space is the issue really as people muck in, and whoever comes over to help at night most likely wouldn't sleep much anyway! what's a missed nights sleep to be part of something soooo amazing? most mates would be thrilled to be invited along and would happily perch on a cushion on the floor, I'm sure.
its making me emotional just thinking about it. It was the most amazing experience of my life. we have moved now, and when we walk past with 12 DS, we say 'you were born in there, in the bedroom' he likes that. 
good luck!