Getting out of pocket cash back after refinancing hard money loan

[Ben M.]

Do I understand correctly that one may be able to get their out of pocket cash back after refinancing a hard money to a conventional loan?

Let's say I bought a property for $100,000 and the property needed $25,000 rehab for a total of $125,000. The hard money loan would only lend me $100,000 and I spent $25,000 out of pocket.

The house has an ARV of $160,000. I refinance to a conventional loan and the bank will give 80% of that amount which is $128,000. Would I really be able to put all $128,000 into the new conventional loan even though my hard money loan was only $100,000? If so, would the bank just give me a check of the surplus, in this case $28,000?