lo-doc finance for small communities?

I’m looking at small communities (almost by definition rural), with a mind to lower prices, potentially lower ownership costs and potentially higher rental yields. Obviously this isn’t a new thought – people have been doing exactly that for a fair while, really.

But, I’m still thinking of using “standard” formulas for the deals. I.e, I would like to stay at say 70 or 80% LVR to maximise my leverage. I’d also like to use lo-docs.

My investigations to date have shown that it’s surprising hard to find finance at all in some of the places and at a decent LVR in others. For example, I couldn’t get anyone to actually offer the finance on a $45k cbr house in a small rural town in Tasmania. And it looked like I could get finance for a house in a small rural town in WA, but only at 60% LVR and only for a minimum of $50k loan without LMI, or $30k with LMI. The house I was considering was only $35k! [sick3]

Sure, the property prices are pretty low in some of them, so I could consider a higher a LVR, but it drastically changes the COCR, amongst other things. If I’m trying to get the best return for the money I’m putting in, I would like more options. As I said earlier, I’m sure I’m not the first to run across this problem and I’m sure some people have found solutions to it.

I’m aware there are all sorts of other issues to be investigated with towns like these (demographics, rental demand, employment, etc), so I’m not suggesting I’d automatically buy in the towns I find. But, I’d like to know what finance options I do have there.

So. What advice can offer on financing property in small rural locations?

Any ideas?

thanks,
Craig.

100% of the shots I don’t make don’t go in – Wayne Gretzky