Cash out Refinance question

[Account Closed]

I’m trying to wrap my head around how a cash out refinance works.

Scenario:

We buy a property that would have market value of $300,000 if it were tenanted and cash flowing.

We buy it for $220,000 with seller financing. We put $20,000 down and the seller holds a note for $200,000.

We stabilize property by rehabbing units, renting then out, and bringing cash flow up to market.

Roughly two years go by. We’ve put in our down payment of $20,000 plus we’ve paid off $20,000 of the note. The mortgage on the property is now $180,000.

Say we went to the bank and asked for a cash out refinance.

Would the bank give us $300,000 - $180,000 ($120,000)?

The $180,000 would pay off the seller putting the bank in first position. And we’d have $120,000 minus closing costs?