Finding a Good Foreclosed House to REHAB

This older home was an REO and sits on a corner in an older area of town near apartment buildings. As we take our students through it on an REO/Foreclosure tour everyone is holding their noses. The smell of cat urine is bad! It was on the REDC auction. The bank rejected the bidders final price ~$90,000 from the auction and either re-auctioned it or put it back on the market. So if the auction is not absolute, you may not get the house even if you are the highest bidder.
If you are looking for a house to rehab you will get a bigger discount by making offers on houses that are too bad, ugly, or smelly for the average person. That eliminates most other competitors from making offers.