First Deal Re-finance Question

[Benjamin Miller]

Bought a foreclosure at auction and currently cleaning it up to rent. I know the BRRR method has your refinancing with a bank but I was told that if you purchase a foreclosure they re-finance off of the purchase price not the appraised value. If I do that it will limit my purchase power for the next deal ($24K 20%down). Just wanting some advice if there is a way around this for a first deal no track record individual. Thanks for the help!

Numbers are:

Purchased: $120K

Appraised value: $140

Rent for: $1300/mo