Foreclosed homes typically sell for about 20 percent below the market value. Sounds good, no? However, there's a catch: many foreclosed homes are in poor physical condition or come with legal problems attached, which don't make them much of a bargain. Also, those type of discounts are often found at foreclosure auctions, where you don't have much of a chance to evaluate the property beforehand and your competitors will likely include banks and other savvy investors. It's not a place for beginners.