Equity- should I invest or buy

[Luis Vaca]

I'm posting from my phone, and when I browse topics they are not divided into subsections so I haven't browsed much. So this might be a repeat question.

Anyway I'm 37, bought my current home back in '09 for 250k. After a refinance to rid my PMI I currently owe just under 200k. Current value of my home now is a guess of about 420-430k here in southern California. I feel I should make some kind of move, I've always wanted to invest but after I lost my first home in '09 due to the crash I backed off. So my goal when I was younger was always to have some incoming cash flow giving me the option to retire early. Ideally if I can do it now I will.

So right now I feel I have a few options: 

A) I can sell this house and roughly have 200k in cash to buy in a cheaper area, put it all into a purchase and maybe pay off the mortgage in about 5-7 years. This would be a safe route as I wouldn't invest but I'd be paying off my home real soon and not worry about a mortgage. 

B) Keep this one. Keep renting out my other 2 rooms (1000$) in cash monthly. And try and invest by other means without selling. I have some cash saved so I can look into a multifamily in a cheaper area as well. ( I'm by the coast so everything here is expensive) 

C) Keep this one but rent it out completely and buy another property as my primary ( possibly in a cheaper area). The rents for my size properties are between 2200-2500, my payments with taxes/insurance, water are 1800$. So some cash flow can be had here of about 500$. My job makes it easy for transfer as we have outlets in every state, and we can live basically anywhere in the country for work. So an option can possibly be getting a duplex and living in one of the units. 

I know this information might be a bit vague, but what do some of you seasoned veterans think of this situation. What would you do to get started with this equity? Take advantage of it or keep it? Thanks for any replies