One of the biggest expenses is doc stamps on the deed. FNMA is exempt by statute from paying this tax. The buyer pays it and it is roughly $700 per every $100K of purchase price. Make sure to read all the contract addenda that banks attach to all contracts on REO and pre-foreclosure properties.
Find an agent that knows foreclosures. You must be ready to move quickly if you find a deal. Proof of financing must be in your agents hands when the offer is made. If you found a great deal, others are going to find it too. You have to tie the property up before multiple offers come in. How your offer/counter offer strategy in place before you write the first offer. Banks counter fairly quickly on REO - not so quickly on short sales.
The biggest expense is moving too slowly. As an old investor mentor of mine says, "You can't steal in slow motion."