Or just require a full year lease to students?

I don't know your area, so I can only write to my experiences in PA.You don't really convert your property to Section 8 (S8), but rather sign a lease with a tenant who happens to be funded by S8.

Screen tenants thoroughly, have a solid lease, and maintain an emergency fund for unexpected expenses.

As long as you express the key details of tenant information, lease dates, along with any standard information to vacate, and clear language of "non-renewal".

I plan to put a $600 utility cap in the lease.

Last but not lease, start writing offers and don't get stuck in analysis paralysis. 

The “borrower” would have an option to buy back the property if (1) all lease payments (“mortgage payments”) have been made and the borrower/seller pays is the sale price/loan amount in full at the time the option period/note matures.  

You also want every adult to be named on the lease and sign it.

You need a local/state specific lease.2.

These marketers would have the novice investor believe that the narrow focused “education” they provide combined with the “holy grail” formula (wholesaling, subject to, flipping, lease option, discounted note purchase, etc.) is most, if not all, anyone needs to become “independent” and successful, usually by month 12.