Start with a first mortgage.
A lender gets a judgment of foreclosure on a property which includes an amount on the judgment of the banks entitled moneys. Also in the judgment is the date the sheriff will sell the house at auction on the court house steps.
There are two parties named in the judgment, the Plaintiff(s) and the Defendant(s).
When the day of the Auction comes the clerk, who represents the sheriff, calls the case number, not the address. The clerk will ask if the Plaintiff's representative is there. If the Plaintiff's representative fails to appear the auction is canceled and rescheduled. If the representative is present the auction begins.
The clerk asks what the bid is for the property and the Plaintiff's rep says $100. Then someone in the audience thinks "Heck, I can beat that" and bids $500. At this point the Plaintiff's rep bids $285,964.81 which just happens to be the amount that was on the judgment.
On 1st mortgages the bank wins
Mow look at the 2nd mortgages
All the legal stuff was the same and the Plaintiff's rep is there and does the same thing BUT a 2nd mortgage is way less than the property is worth so some unsuspecting soul has check the value of the property and sees what the judgment is for. Looks like a great deal
After the Plaintiff's rep bids what the judgment is the poor unsuspecting sour out bids and wins! Woo Hoo! NOT SO FAST!
This was a 2nd mortgage and there is still a 1st mortgage out there that might actually be current and is superior to the 2nd. All the poor unsuspecting soul has done is remove a debt for the person that still lives in the house and will for a long time to come. I have seen it happen
Ultimately, I would consult a local realtor who specializes in these types of transactions who can help advise you about what areas sell the best.
Visit REIAS. Network through places like bigger pockets.com, here and Ron LeGrande's website. Get on LinkedIn and network with other investors. Your first deal is most likely under your nose.
Whatever you do, don't go it alone. There are some great folks out here who want their fellow investors to succeed. All the best!