As a private lender, you provide capital to a real estate investor who uses it to purchase or improve a property. The investor pays you interest on your loan, typically with a fixed term. Your investment is secured by the property, which means you have a lien on it as collateral.

Returns vary based on market conditions, the risk of the project, and specific agreements, but typical private money loans offer annual returns between 8-12%. Terms and interest rates are generally higher than conventional lending because you are lending to fund time-sensitive projects or projects that might not qualify for traditional loans.

Private money loans in real estate are often short-term, ranging from 2 weeks to 6 months. The exact term depends on the nature of the project. Terms can be flexible, so it's important to clarify the duration with the borrower.

Private money lending typically involves individual investors or small groups lending their own funds, often with personalized terms. Hard money lending, on the other hand, generally involves institutions that specialize in high-interest loans and may have more standardized terms. Private lending often allows for more flexibility in negotiations and terms.