If you buy a dropped domain from Snap or Namejet, the backlinks seem to be worthless for SEO.  They are valuable for traffic if it's targeted to your site.  Go ahead and 301 redirect into your site because it's the traffic from the back links that is worth something.  I use the Google URL builder to redirect these names so you can see the domain the traffic is coming from.
The bottom line is, drop domains deliver traffic. How come? When people register a drop domain and build a website on that domain, they often attract backlinks. They also can update their website and generate a community or a brand. Whatever the case is, there are four things that happen that results in traffic for those websites. They create a backlink footprint, which drives direct traffic. This backlink footprint also produces SEO benefits. The more these website owners promote their website, the more goodwill they build up in their target niches and online communities. Finally, the more they manage their online blog, website or information site, they gain some sort of presence on social media.
The bottom line is, drop domains deliver traffic. How come? When people register a drop domain and build a website on that domain, they often attract backlinks. They also can update their website and generate a community or a brand. Whatever the case is, there are four things that happen that results in traffic for those websites. They create a backlink footprint, which drives direct traffic. This backlink footprint also produces SEO benefits. The more these website owners promote their website, the more goodwill they build up in their target niches and online communities. Finally, the more they manage their online blog, website or information site, they gain some sort of presence on social media.
Domain name market is heavily oversatured these days. There are more than 80 milion domains registered in total. Finding a right domain name is sometimes nearly impossible task, especially if you are not willing to pay extra cash to buy a domain that is already grabed and now for sale. If you have already tried to type in domain names for availability you probably had zero success, especially if you have searched for more generic words and keyphrases. The author of this program remembers he searched virtually for weeks to find some more or less usable names that he could use, and that was years ago. Since then, finding a good domain have gotten harder. Much harder.
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.

For example, placing your backorder at NameJet will reveal your interest to other potential buyers so if no other backorders are present you should wait until the last possible moment before the deadline to place your backorder — because if you’re the only backorder, you’ll get it for the minimum $39 bid on expiring names and it won’t go to auction.

Warehousing: I have no clue to a percentage of warehoused domains but I know it happens. Tucows even admitted it on my blog “I know you don’t like that we’re allowed to select expiring names for the Tucows Portfolio rather than letting them all go to auction or drop but that seems to be something we have to agree to disagree about.” ~ Ken Schafer (1st comment) http://www.dotweekly.com/could-you-explain-tucows
If you buy keyword specific domains, you're really buying the type in traffic.  I use the URL builder and redirect through that URL so you can see how much traffic your getting from the keyword domain.  There seems to be no rythme or reason to what keyword domains deliver traffic and what don't.  By tracking traffic with the Google URL builder you get a feel for what names are giving you traffic and which are not. ie. the plural, the singular, two words, three words, the possessive, etc.
Trust flow refers to the number of quality backlinks that a website has. If backlinks from websites that have a high domain and authority ranking point to your site; your website’s trust flow will increase. Trust flow is also measured on a scale of 1 to 100. If your website has a large number of backlinks, but they are not from trustworthy and reliable domains, your websites trust flow will be low. On the other hand, if you even have just a handful of backlinks to sites that search engines rank highly; your trust flow will increase.
Now, a lot of times these great domains that have pending delete will get snapped up in a flash. Okay? You want to use the same system that’s 500,000 domains so you can always sort them by whatever you want to do to make sure you’re only looking at quality domains and look at the link profile the same way. Once you find one that you like, you can’t just sit on your computer at Go Daddy and wait for it drop on 6/14 and expect to get it because there’s going to be a lot of other people gunning for that domain. You actually have to use a service like Snap Name.
Backlinks – These are basically anchor links present on external websites that take the visitor back to a domain. The higher the number and authority of backlinks, the higher the authority of a domain. For example, if a domain has a backlink from Forbes, TechCrunch or BBC, it’ll gain a lot of authority in the eyes of Google and other search engines. It’s like attaching a reference letter from Bill Gates to your CV.
For many reasons, these domain names expire and become available to the market. Perhaps the domain renewal fees are unpaid. The owner no longer needs the domain or business came to a halt. With the large pool of domain names that become invalid daily, investors who are looking to cash in on the traffic that they generate have to do extra work to find the most profitable every day. The trick is to find expired domains.
DomCop has a great offer that all of you buying expired domains should consider. For the price of a couple domain names, you can use DomCop for a month, snag some excellent domain names, which would otherwise cost you thousands of dollars. If you're considering expired domain software and don't have the knowledge to program your own crawler, I'd lean towards DomCop.
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