I did an initial walk through of the vacant unit and on the surface, it definitely needs to be updated.

Walk away head down?

Pre approved may be that the short sale was previously approved at a certain price and the buyer walked.

There are a couple of units where the landlord pays the utilities (aka my parents) but when I walked by the property last week I noticed they have window air conditioning units.

A third party will force an additional layer of accountability and precision vs. one person doing it themselves.

Just want to verify this info with you all local professional investors.In addition, are there any property tax discount programs created by the city or state available to incentivize investors to invest in philly, just curious to know as well.

Check with your employer/benefit plan, some have rules that if its not your primary residence that you need to pay back the loan within 5 years, some plans do not let you make additional payments but allow pay off in full as early as you want, also if you leave your employer anytime before the loan is due, you may have to pay it off or pay a penalty.  

Drive/walk/call for dollars, call MFR landlords listing units for rent and offer to take the entire property off of their hands, that sort of thing.

In some instances, no money down can be found but probably not in high end properties but rather D class properties, motivated owner just wants to walk situations.I do private lending in FL.

It still was a good learning experience and made money in the long run.I wouldn't dissuade anyone from buying a HUD home, I'd just say, go in with your eyes wide open, get a good inspector / contractor maybe to walk it with you.