There are some sub 75k deals out there that would make great buy, repair, rent and hold properties but I'd prefer to be able to preserve my own capital as much as possible to knock out quite a few deals this year and in the next several years. 

I'm sure you've seen but rents are still pretty high in NJ which means tenants are having a tough time with short inventory.

How do I rent properties to Sober Living?

It would be worth  asking the current tenant if they would be interested in staying even with a higher rent.

The seller is renting it back from me for the first year at least.

I'm sure as time goes on, rents will go up and your asset will appreciate.

I would be living on one floor and renting out 2 bedroom on the second floor (they would have to share a bath.)

In general, you should get 1.5x-2x what you could get for LTR gross rents. 

The plan is to replace all current free-market tenants with Section 8 tenants, as the rents are higher.

Land lording, locating tenants, collecting rent, property depreciation.