I was dead set on purchasing a rental for my first property using the FHA 203k on a foreclosed home, but I am realizing now that personally, flipping a home would probably make more sense since I am not sure if I want to stay in upstate ny or move to a more tax friendly state.

Unless there are laws or regulations in Philly I'm unaware of but there are very few CRE who WON'T want or require you to close any kind of pure investment property in an LLC and usually we have a more difficult time finding a lender who allows a borrower to close in an investment property in their personal name- you should have no problem with this.Feel free to PM me to discuss if you like!

It's easy to make $50k a more a year by doing this and most importantly it won't cost you a dime but your time. 

Since you will be quite tied up during medical school, maybe a more passive investment may be a better course than something more active.  

I live 4 hours away from the property and would need to have my property manager mail me my mail. 3) Ask my private lender to refi the loan with him and give me a more favorable rate.If anyone has been through this before please comment and offer some advice.

If possible my first thought would be to convert to a apartment, and cosmetically alter so it has a more residential type entry,, and facade.   

Also, as you self educate you will find a more specific strategy, the more focused you get, the more someone else can help you move forward.

Well, if I didn't have to worry about money, I could further my other pursuits (become a financial adviser, build a financial business focused around helping those in crisis, and a little bit of rubbing it in every person's face that has told me I can't do it).I'm still wrestling with this moral dilemma, but one day I'll have it sorted out and could give a more concrete answer.  

Is the house in a more desirable part of town? 

I haven't explored condo conversions or anything like that as it involves a more sophisticated market understanding that I don't have yet.