I can think of a couple of seemingly great reasons to stay in the deal, which would be 1) they'd get a portion of the rent we'd be paying to live there (again, I assume this would be split 2:1:1), and 2) if we live in the house for a couple of years, couldn't we sell it tax-free, since we would be owner-occupants?

I think it would be better just to stay on good terms and let him know you will contact him when you are ready to sell.

Preferably stay for one year and find another house.

Therefore, I don't have definite plans for how long I'll stay in Oregon, and consider the possibility of someday returning to the Austin area.

You Pay, You Stay. 

Lastly, your $8K and market knowledge could be a great start to a partnership with someone who has more funds but less time & knowledge...

A knowledgeable real estate agent and property manager with local market expertise can help you navigate neighborhood dynamics, connect you with contractors, and even identify off-market deals that fit your strategy.

Two, the tenants will likely stay longer and there will be less turnover, which mean some savings on turnover costs.

Short term rentals are legal when the host is living in the same apartment as the guests and there are no more than 2 guests staying with the host."

We hear less BPRE episodes featuring individual investors, and it missing the breadth of STR and LTR knowledge that David Green and Rob brought into the discussion with the guests.