2) prerelease auctions.  These are domains where the auction venue has contracted with the registrar, like Fabulous or Moniker, to auction off non-renewed domains.  Just before a domain enters the pending delete process, it goes to a private auction to any person who has backordered the name.  Some people feel that back links on these type of auctions still provide a SEO benifit. My testing indicates that there is zero SEO benifit when these domains are redirected into another site.  So if you get a domain with "pink squirels" in a lot of achor text to a domain and then point it at your domain, you don't rank for "pink squirels"
Building a solid domain portfolio is not a piece of cake; it may take you several months or years to achieve this goal but it will definitely be worth it in the end. When you are in the fishing phase, look at the potential of the domain name. Another common strategy used by seasoned domain flippers is to get hold of some high profile domain names and sit on them until they soar in terms of value.

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That said, my recommended budget for beginners would be $500+. Using this budget you could buy a bunch of high-potential $10 domain names, expired/dropped domain names or a mix of both. It’s very important to invest only what you can afford to lose and treat this as a side hustle till you get the momentum going. As you gain experience, industry expertise and some sales under your belt, you can then consider slowly growing your business into a full-time gig.
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