If you are pursuing option 1, then you will want to use an automated service for the reasons mentioned in the article. Follow the process in the article to see which registrar the domain name is located at. If it’s at a Auction House like GoDaddy, NameJet or SnapNames, I believe they publicly share if there is a backorder on a domain name but not who placed that backorder. (Any interest in a domain name may be enough for someone else to place a backorder, thereby driving interest in the domain name that may be visible to the registrant.) So if the domain is at a registrar partnered with one of these companies, then you’ll have to monitor it manually (via calendar entries based on the whois expiration data) to maintain your distance.
We are a LauncHUB funded Startup that focuses on big data research of domain names and Whois information. SEO experts can use our unique system for finding expired domains with authority and backlinks. Investigators can use the same database to find information for domain owners and hosts with Reverse Whois and Reverse IP tools. We can also offer brands trademark monitoring in the vast pool of ccTLD domain names.

Of course, this does not happen equally across the board. Some site owners are lazy and barely put in any effort. As you can probably tell, the four situations I outlined above probably will not occur for website owners who are lazy. Now, for website owners who put in the work and the time for their online properties, you can bet that they would get to benefit from the four situations outlined above.
Also note the Expired Domain Plugin is a lifetime “per user” license, so if you have multiple ScrapeBox licenses registered to the one email address purchasing the Expired Domain once will activate the plugin for all your ScrapeBox licenses with the same email for life. The plugin is a one-time payment and is not a monthly or yearly subscription, all updates are free.
Searching for a suitable domain name for your website can be quite trying. The reason for this is that the names that you want to get have already been assigned and are not available. As an SEO you know the importance of getting a domain name that describes your business as closely as possible. For example, if you are running a car rental service, you will look for a domain name that has the words ‘car’ and ‘rental’ in it. So if you can’t find a suitable name, you could use the expired domains tool which might show you domain names that would meet your requirements.
I had two domains, a .com and .net with godaddy. I’m beyond their redemption period ($80 fee), but they said it should be released back to the public domain soon and I may be able to get it back. Before I knew this, I paid $12.99 plus ican fees for the .com thinking it was available as the rep told me she was able to add it their cart, and I paid a $24.95 fee for back ordering my .net domain. Shortly thereafter, I received an email from godaddy saying:

I wish I could tell you that expired domains are some sort of magic bullet solution to all your traffic problems and headaches. Unfortunately, if I were to say that to you, I would be lying. There are drawbacks. Just like with anything else in life, there are advantages and disadvantages. The problems with expired domains is that they are often hard to find on your own. You can take wild guesses and waste a lot of time, effort and energy, and end up with nothing. Also, if you were to try to scope out drop domains by trying to find them in the most common way, which is to use a drop domain exchange, expect to pay a lot of money. Why? Because of heavy competition. Keep in mind that you’re not the only person who knows that dropped domains can bring a lot of traffic to the table. There are many other online marketers out there that realize drop domains' traffic value.
The better quality links (From Google, Wikipedia) that a website has the higher will be its domain authority. New websites start with a ranking of one, and as the number of links increase the domain authority rises. For example, a sports website that has links to sports newspapers and sports reporting sites will have a higher domain authority than a sports website that only has links to other sports and sports blogging sites.

GoDaddy Auctions is a marketplace where GoDaddy lists domains that have expired and are in the renewal grace period. Apart from these GoDaddy also lists other domains, but the expiring auctions at GoDaddy are the most popular. Based on the percieved value of the domain, domainers and SEOs bid on these auctions. If the original owner does not renew the domain, the top bid wins the auction and gets the domain name.
Quite a lot of the time majestic trust flow will be great but ref domains below 10 but when I check ahrefs its considerably higher for ref domains. Without ahrefs I would of passed over these domains and missed out. Worthwhile addition if your building a lot of pbns. I also use linkultra backlink for my final spam check as it checks language,site type and if backlinks are comment, profile spammed etc enabling me to check if the backlinks of the domain are solid very quick.

Lets look at some settiings, so you could enter a list of websites to crawl for expired domains on, or you can enter a search query say you're looking to form a pbn to boost your money site, that's about horse riding or something you could put horse riding down there and then it'll search, Google for horse riding and then crawl all the domains that Google brings back to you. Then we've got endless crawl and you basically you put in a few seed websites and then it will just crawl endlessly from those websites. So it will take all the domains off those websites. First they'll check whether they're expired or not. If they're not expired, then it'll start crawling them and then it will crawl the ones it finds from them and so on so on and so on. It will just keep going ok.

By using GoDaddy auctions section, you can also use keywords to search the domain names that you are interested in. For instance, if you type the keyword something like “fitness”, it will list you out all the domain names that matches with the keyword “Fitness” so you can easily make a list of all the domain names with your desired keyword selection.
Here's an old post on search engine roundtable that claims google's policy is to discount previous backlink juice when a domain changes ownership.  I'm not convinced whether this is actually true or something Google says to discourage excessive domain buying / 301 redirecting for SEO benefit.  The comments above seem to give varying opinions on this matter. Would be great to get to the bottom of that one!
When you see one that looks pretty good you can just click on the bid button and you’ll be taken to Go Daddy Auctions which shows some more information about the domain bidding process, how many people have bid, the traffic potential per month, the price which is now $12. How much time is left? You can make a bid. It’s based on the link profile and it’s relevancy, authority and your budget. This domain looks like a good bet for you.
NameJet is $69 or $79 per backorder, so there’s that. And they don’t have the best drop catching technology. If they’re an auction house partner, then they always get them but that’s because they’re partners not because their drop catching technology is great. Plus, when you put a backorder at NameJet that’s public information and other investors can see your domain name backorder with one bid.

Here's an old post on search engine roundtable that claims google's policy is to discount previous backlink juice when a domain changes ownership.  I'm not convinced whether this is actually true or something Google says to discourage excessive domain buying / 301 redirecting for SEO benefit.  The comments above seem to give varying opinions on this matter. Would be great to get to the bottom of that one!
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Domain Hunter Gatherer gives you a lot of options when it comes to getting a starting point for your drop domain search. This amazing tool also makes filtering drop domains so much easier. You have to understand that the vast majority of drop domains out there are complete junk. You have no business buying them. Unfortunately, if you don’t know how to filter correctly, most of these domains would look very attractive. You end up wasting your money on domain names that do not recoup the dollars you invested in them. Domain Hunter Gatherer makes filtering so much easier. It incorporates Moz and Majestic API support without requiring you to have an account on those services*. It quickly lets you know how many social media mentions a particular domain has, it lists out the number of backlinks that the domain used to have, and so on down the line. It's a very fast piece of software because it is multi-threaded. Finally, once you've identified certain domains you'd like to track, you can save them very easily. If you are looking to take your online income to the next level, you should definitely get your copy of the Domain Hunter Gatherer today. It will definitely make your life easier.
The whitelist filter for wanted characters is now split into three filters. The old whitelist is now named whitelist (only). When used, the domain has to consist only of the defined characters or numbers. No other characters are allowed. The new whitelist (any) filter finds domains that have at least one of the defined characters or numbers. The new whitelist (all) filter finds domains that have all defined characters or numbers at least once.
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