I live in a smaller suburb inside Memphis called Bartlett; It has a great community and amazing schools.

Also, you might consider swapping out one of the living room photos for the best bedroom photo in your first five photos.

Great news it looks like you have a ton of equity and I'm guessing the one side covers your expenses.If you want to keep it - I'd probably look at the AHA (section 8) route prior to co-living. 3-4 bedroom vouchers should net you more at the end of the day than the co-living model.

I just moved from Houston after living there for about a dozen years.

Quote from @Gabrielle Cutler: HI there,That’s partly why I’m on here, I’m not quite sure the best route, especially living in the Bay Area where everything is a bit more expensive.

If your willing to do so, you can live in the casita and then rent out the main home and have your tenant pay the majority/all of the mortgage (depending on what type of deal you find obviously). 

I can promise you that my first deal was TERRIBLE, but I lived at a reduced monthly cost to living than renting/buying a single family and that is what mattered. 

Did you plan to rent this or live-in flip with the intent to sell?

Also, what if I can't find people to live in the home?   

I jumped back into school while using my home inspection business to feed my family.