Buying a property with equity

[Mike Kooser Sr]

I recently started looking at auctions of rental properties that have tenants in place.  If I were to buy a house using bank financing for 80k but it would appraise for 100k I know I have to put 20% down.  

My question is if I can put a light rehab on the house and get it to appraise for 120K and refinance to get the 16k cash out to repeat the process.  

Would it be best to use bank financing for the first purchase or should i look into hard money(13%) then bank for the cash out refi.

These are just example figures to make round numbers im looking at properties of less cost/value.

Im trying to figure out the best way for me to acquire deals but not having to tie my money up restricting me to move on to the next