The bidding on home number 546527 — a moss-colored brick house in Baton Rouge, La. — began at $103,333.33. Less than a minute later, Ray Williams owned a house he had never set foot in. His winning bid was $130,000. The appraised value: $155,000.

After looking it over, Williams figured he would spend $20,000 repairing rotted wood and other defects. Then he will put it up for sale — at $205,000.

Seven months ago, Williams joined a legion of investors who buy and sell foreclosure properties. So far, he has bought seven.

“If I’m not confident I’ll make $30,000 per property, I don’t bid,” says Williams, 42, who used to own and run Domino’s Pizza outlets. He has hit his goal on the first five.

As interest rates rise, more homeowners are falling into foreclosure. That is what is prompting the wave of bargain-hunting investors now descending on courthouse auctions across the country.

“It’s just crazy. We have 100 houses [at auction] each week, when we used to have 10 or so,” says Elaine Began, a deed clerk in Macomb County, Mich. Three years ago, the Montgomery County (Ohio) Sheriff’s Office was “lucky to get 50 people to an auction,” says Laura Wright, a foreclosure clerk there. Today, 120 often show up.

Some may be sorry they did. Novices face a host of risks. Foreclosed houses can come with hidden debts. Homeowners generally won’t let you inspect the house before you try to buy it out from under them. Not knowing the local rules, which vary from state to state, can also cost you big.

The notion that $250,000 houses can be had for a few thousand dollars “is largely a myth,” says Peter O’Connell, a former banker who has invested in foreclosures for years, including near his home in the Florida Keys. “If there is any equity in a house, you’re generally not going to get it cheaply.”