Foreclosed homes, bank owned homes, and auctioned homes are often the way to get a great deal on a little house. Often they are in disrepair and need to be rehabilitated, which can be a risk for home buyers that are not prepared, and it might not be known what the problems are with the house. A good real estate agent can tell a story about a house, the people that may have lived there, and get a quality home inspection done on the property, but often when we are making these deals we have to make them in cash, and quickly and may not find any problems with the house. Thats why it is not as common to buy foreclosed homes, because not everyone has the capital to buy houses outright.
When you are successful in rehabbing your first purchase, you will make money in the equity on the home and you can rent it out or sell it as your situation demands and the economy suggests. If you buy a home that doesn't have a lot of problems, you can start building equity right away towards your next home. Thats why having a real estate agent is really important to help negotiate the market.
Some sites that offer a glimpse of foreclosed homes: