Yes that is right. But normally cash out refinance will not be 80%. It will be 65-75%, so you will have to check with the bank.
Also - look up how long the bank is going to require you to own the property before you can do the cash out refinance. Many banks have these holding periods where you must be on title for a certain amount of time.
@Ahkeem Smith That is correct my friend. However if you have a lender who will do a HELOC on the property at 80% then you can get a second mortgage(HELOC), usually a 10/20(30 yr note), first 10 years interest only and last 20 years principal and interest(Fixed). In this case, using the numbers you have laid out, at 80% LTV the lender will give you a second mortgage(HELOC) of up to $72.000 - $40,000(Remaining principal of first mortgage that can't be counted as equity) = $32,000. Many investors will take this option as you will only be charged monthly for what you use on the HELOC opposed to cash out refi wherein you will pay a fixed amount(Assuming it is a 30yr fixed note) for the next 30 years. All the best. Always remember to persist and you will win!!!
As the previous poster mentioned 75% is typically the max a conventional lender will do on a refinance. However anything is possible. If you can get 75% on a HELOC I would take that option over a cash out refi. Usually the closing costs are much less and the first 10 years are interest only payments.