Buying foreclosed (REO) homes

I just found a pretty detailed post on a real estate blog about buying foreclosed homes. The often-used term for this is "REO" property which stands for "Real Estate Owned" [AKA the bank owns it].

Getting financing:
--PROBLEM -- The house may be in disrepair -- this could adversely affect the appraised value and cause the lender to require items to be fixed before being able to close.
--SOLUTION -- Try to get a construction loan or use some other type of unconventional financing to buy the house. Then, after the work is done, refinance the property to a traditional mortgage (if you plan to keep it).