Expired Domains can be an excellent source of income if you know what you search for. There are more than 50 thousand expired domains being deleted every day from the registrars and then returned to the available pool.
Let me explain a bit more about the process itself. Once the domain is in its expiration state there is always a redemption period which can last 30-45 days and this is where the owner can still redeem the domain name for somewhat larger fee than usual (depends on the registrar where domain name is registered). Once this redemption period is over registrars usually hold close-out auctions for a few days in order to monetize on the domain name – some of them still put the previous owner priority. And once this period is over, domain is in pending delete state which is always 4 days. In this state no-one really owns domain name anymore and when 4 days pass the domain is being returned to the available pool.
In the 4 days pending delete period the domain name is good for speculative research and potential buyer hunt. However there is no guarantee that if you leave backorder for a particular domain name the drop-catcher (companies like Vastus Domains) will actually acquire domain name because competition is very fierce. This is where you should choose carefully not to make mistakes and leave money for potentially lost domain. Always choose drop-catcher which does not require you to pay upfront but for completed deal.