Don't know anything about meth homes, but I did buy a HUD home as an investment. Turned out to be a very good investment. As things turned out, the home didn't have the water turned on because of a problem with the main valve into the house, which was an easy fix, but HUD isn't allowed to do it or let anyone else go in to do it. And because of that, it was impossible for anyone to buy it on credit. No water means no inspector will sign off on it, which means no lender will finance it. HUD homes are supposed to be offered up first to would-be owner-occupiers, who can get a sweet deal on it. Only after no one takes advantage of a specified buying period can investors bid on it. Anyway, I had to scrape together cash to buy it because I couldn't get it financed either. But because no one else was bidding on it, I got it at the lowest price they'd let it go for.
And, funny story, while I think the whole inefficient government bureaucracy stereotype is way overblown...holy hell. HUD did everything they could to live up to that stereotype. At one point I had to re-sign all of the documentation at the last minute because it had originally been signed in black ink. They required blue ink. Seriously.
All that said, I think HUD homes are a potentially good steal, especially if there is some minor problem that keeps everyone else away from it. Just make sure to have a blue pen.