The bigger towns in urban areas have police auctions, I just picked up a trek for $10.00 (mountain track) and a entry level fuji for $2.25. I only wanted the wheels on the trek, but I'll probably rebuild it over the winter. the fuji just needs a tune up. You can get good picks, lots of stolen bikes that have been stripped and mismatched. If you know a little about bikes you can get good deals.
What happens a lot is a group will steal bikes in one town get caught in another ,the people who got their bikes ripped off never report it or report it without the serial number so the Local PD auctions them off once a year. I been doing this for a few years I basicily give the bikes to people at work who have second homes or shore houses, and it keeps me from sitting in front of the tube all winter.
Estate sales run by the family are also good because unless you know what you got, you can pick something up cheap if the dead person was into cycling.