Garage sale is a great place to start. Most of those bikes are owned by the sellers and you rarely find stolen bikes. $50.- is a good start point for a negotiation. If it's already priced $50.-, try $30.- and see if they take it. One of my friend bought a bike for $50.-at a garage sale and it wasn't a Walmart bike, all components were made of aluminum alloy.
You can try Karim Bikes in Berkeley. He has hundreds of used bikes for sale. Also Craigs List, just watch out for stolen bikes. The Oakland Museum has their annual White Elephant sale in early March and they always have a bunch of used bikes reasonably priced. Check their website for details.