You Need a Good Realtor
What is tough for a realtor is that the buyers today may not qualify for government programs to prevent foreclosure, since some lenders are reluctant to modify loans for those who they consider in a short-lived slump.
Keep in mind that foreclosed properties may not have had the best maintenance over the years, and many have water or mold damage.
If you don't have cash for a down payment, you might work out a deal with the seller so that they can stay in the house, rent free, for a certain period of time, or offer them reduced rent, in exchange for their labor to help you fix up the place before you sell it.
You should also make sure that you do a complete market study of the area so you know what to expect as far as rents paid, and if those rents will cover your mortgage, insurance, taxes and any other costs, and also keep on top of home values in the area.
Sometimes properties can look great when you examine the rent payments coming in but then lose their luster when you look at the cost of maintaining the property, making the repairs that will come up and you need to investigate both sides of the story to get an accurate view of the financial future of your investment.
It is going to take money to take care of any repair problem and you need to know where that money is going to come from.
The idea behind a rental property purchase is to make it profitable and build your net worth, while at the same time, you are looking to provide yourself with a steady source of income.