Rent-Refinance portion of BRRRR

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Hey guys, 

Just wanted some clarification on how this section works. Lets say, using hard money, I purchase a property at auction for $35,000 that requires another $35,000 in repairs (included in the hard money loan). 80% LTV, so the loan amount is $56,000. After the property is rehabbed and rented out, then what? I have $70,000 dollars into a (lets say) $150,000 property. Does that $70,000 in equity act as a down payment for the new mortgage? 75% LTV would be $112,500. So, am I given that amount, I pay off the $56,000 loan and pocket the remaining $56,000?

Thanks guys