Investment Property loan

[NA Ken]

I was denied a loan to purchase an investment property using quicken loans.  They said the property value must be greater than the loan amount, have a low income to debt ratio, and have enough reserves.

The property is worth 140,000, I have the 25% down payment, which is 35,000.  They calculated that the house must be worth 200,000 and have 25% as a down payment.  I don't understand what this means.  I've always thought that the lower the loan amount, the easier it is to qualify for a loan.

I think what they are doing is calculating the amount from a different point of view.  They are calculating it based on a property that I already own and want to finance it to pull equity out - the last part of the buy, rehab, refinance strategy. 

If I was using the brr strategy, it would make sense to only lend on a property that has a higher value than what I am financing it for.  

For example, if I paid 140,000 cash, rehabbed it, now it's worth 200,000.  Now I would qualify for the 140,000 financing with 35,000 down.  75% of 200,000 is 140,000.  So they are only going to finance 70% of the value of the property.

Is my assumption correct?  Or is the lender just tightening their lending standards?   Or is it both?  Or is it something else?