No deposit – how can we get finance!?

Hi Kirsteh, and welcome to the forum.  Sounds like you have done your homework, and found something with potential. Good on you. As far as finance goes, it should not be much of a problem, as long as you can 'service' the loan (ie in the lenders eyes-or-spreadsheet meet the repayments, which will included of course rental income) I imagine that will not be a problem for you.
So…..couple of ways you can do it, and the 'best way' depends whether or not your 20k equity in your PPOR is availabe right now, via redraw, or whether you would have to refinance your home loan as well, and of course your short and long term goals. Yours is probably one of the very few situations where using both properties as security (often called cross securitising or cross collatorising) could be a viable option, but there are others. Here are the two 'main' ways, using 'approximate' figures. Please note, I am assuming you mean you have $20k equity in your home, via the current loan, and not in the new property – as in all but few cases, the financier uses the lowest of your purchase price, or the property valuation as the sale (and thus loan) figure for calculations.
Option One. Using your $20k (if readily available or refinanced) come up with 5% deposit , $6500, and get a 95% LVR loan on your IP. You will need perhaps $1500-$2000 for inspections, your solicitor etc, plus between $150 and $850 (depending on lender) to allow for settlement fees, application and or valuation fees, and a big chunk of money for LMI (one off charge – lenders mortgage insurance, perhaps around $3600-$4300 or so.  And then…….stamp duty. That's a good chunk of your $20 grand gone, but she's yours, and while 'tight', is a totally seperate entity to your home. Great stuff!
Option Two. You could refinance your home and the new property togehter, but generally this is only a serious consideration when your borrowings (ie price of both properties compared to total borrowings for both properties) would be less than 80%, saving thousands on the LMI…but it does not sound like it would be in your case. Down the track, once the capital growth has kicked in, you could then change this arrangement to suit. Bear in mind refinancing and altering securities can cost money both in valuation fees, and loan payout fees, but if you are not planning on selling or buying more in the immediate future, it may be a good option. ….that said, without knowing the exact details of your current loan (for example, you may have $2ok equity, but perhaps your house has risen in value significantly since your current lender valued it) it is hard to offer any more specifics. That said, I like option one myself, but would be happy with option 2 if it was the difference between getting and not getting your property investment started. But either way, you are essentially buying your first IP 'no money down'.  Congratulations!
  

There are a couple of lenders who will lend against the valuation rather than the purchase price but will be dependant on your Asset position and general over application.