I used to pick up projects for the summer costing between $50-$300, between 2-4 years old, many times with registration papers. I always bought untrained horses because I figure there's usually a reason someone auctions a trained horse rather than sell the horse normally for a lot more money. I usually picked sad-eyed starved things because they can be very grateful once you feed them, and often they don't have anything truly wrong other than needing groceries and handling. I never bought a serious lameness or illness issue in a young horse, although I did have a couple who turned out mean. Those went back halter broke.
My dad did occasionally try to buy trained horses at auction without my help, and that didn't work so well.
My favorite ranch horse was an auction train wreck. He had really pigeon toed feet and several previously broken ribs that continued to hurt him and harbored pockets of infection. None of this was visible during the auction. The pain from the ribs caused him to buck like the devil during warmup, but he was a really good working horse with a job in front of him. He loved working cattle. Never bucked when he had a clear job. To my dismay, the vet couldn't find anything that worked to help his ribs/back, but he seemed fine after warmup and was great as long as you could sit a buck at the beginning. I guess we got our money's worth from him, but I would never have bought him outside an auction, and we paid too much considering the soundness issues.
Another trained horse he bought was drugged, and turned out to be a terrible rearer and bolter once the drugs wore off. He was truly very dangerous, and almost fell on me.
I did buy two elderly mares at different times who were wonderful to ride once they had weight on again, but they were older and very skinny, so it seemed clear to me why someone would dump them. Another note, one of these two was sold to me as 10, but she was clearly in her upper teens. There's a lot of that kind of thing with the unpapered ones.
In summary, great luck for untrained projects, absolutely terrible for quality trained riding horses. If you just want a horse to ride, you're so much better off with a horse you can spend time examining and test riding. If you want a training project that doesn't cost a lot, auctions are great, and you get to transform a neglected horse, which I think is rewarding.
Tug on anything at all and you'll find it connected to everything else in the universe.~John Muir