Recently rehabbed larger home in a great location downtown with a separate carriage house apartment over the 3 car detached garage.

In my opinion whether it's an attached or detached single family you need access to more capital.

My neighbor's selling their 2500sqft lot. their lot has a very old 648 sqft home with a detached old garage.

The biggest obstacle you will face is closing out the permits and obtaining your C/O.

I bought a house that had a detached 1bed/1 bath apartment on the back half of the property.

However, I think you two are looking at it from a much different perspective than most regular-income investors who start out in this segment.1) We start out in this segment mostly because we don't have the money it takes to buy a more expensive SFR or MFR.2) That lack of cold hard cash (or access to a larger credit line) is an obstacle to quickly scaling to 5 properties, much less 10.3) Me personally, I saved for over two years to get the cash necessary to buy my first low-cost high-return SFR. 

You can do it - sometimes our mindsets and limiting beliefs are the biggest obstacles.

He has already wholesaled several businesses this past year and probably already has processes to overcome many of these obstacles.

My personal image for this approach is water flowing down a dry stream bed, always finding ways to move forward, despite the obstacles, and not being hung up on just one way to create progress. 

Losing income during eviction is clearly the biggest obstacle to returns in this business for me.