Unless, there's a large code violation, that I'm trying to get a total for, if I think I can negotiate out a huge discount, before committing to the deal.

I have joined certain real estate groups and gardening groups in my area where I get a discount at certain stores and cheap labor. 

If you use the same closing company you can ask them for an investor or frequent customer discount.

Who told you to do this strategy, sounds like you're buying the property, payoff the note at a discount, add 5K for the seller, the owner is getting an amount as a forgiveness  of debt, your plan has tax consequences.You need to get your ducks in a row as to what is to be accomplished, what's the goal, then stick to conventional methods, is the owner in the property or is it a tenant?

That is a pretty deep discount, especially in a hot market like Dallas where you are using conventional financing and there are people with cash who could fund this deal and make it work in their favor. $600K is an awful lot of money for a new investor.

I'm debating if I should do my first flip or buy a 3-4 flat at 70-80 % discount  and refinance it after a year. 

Because if you get it at a huge discount I'm sure tons of investors will come out of the wood work lol.

What they really mean is, "Will this short sale generate a sum of money that is not substantially less than an REO sale, minus costs for holding, repairs, sale and closing, discounted to present value?"

When you add in closing costs and the like and probably repairs, you'd not even getting a 10% discount there. 

Thus a 30% discount is a big chunk of change (we're talking a maximum offer of 350k on a 500k property even before capturing my fees and repair costs.