If you’re lucky and smart, you can score excellent real estate investments at a foreclosure sale. But it's not for the faint of heart. Potential returns can be high, but so are the risks, because you don't get to inspect the property. Worst-case scenarios might include a basement full of oil from a broken fill valve, hazardous waste in 50 gallon drums in the attic, previous fire damage, mold or asbestos.
Another risk is title problems not cleared by the sale, such as claims of unpaid workers, or easements that prevent expanding the home. And if the homeowner won't move out, you have to pay for a legal action of eviction.