I really don't think the problem is that you have too many kids or too little space. I know people make it work in spaces such as yours. You just have to figure out how to best organize naptimes and get the discipline under control. It takes time and it isn't easy, but I am sure you can do it! I agree with the others who ahve said to put the 2 year old either in a playpen or on a mat on the floor. I never have daycare kids on family beds. In fact, as a parent, I would be a bit creeped out if a daycare provider wanted my child to sleep on her bed...I don't know...maybe I am wierd that way! Good luck and believe in yourself!