Private Lending Question

[Steven Horvath]

I am very new to everything, especially how loans work, and need a little clarification. Lets say i have a rich family member that would loan me the full cost to buy and rehab a house at around 8-12% interest with deferred payments until i got a tenant. And my goal is to rehab the house and then rent it out for long-term cash flow. lets say 1 year after the purchase i am able to get a bank to refiance my loan and i could pay my family member back all their money and have a rental property with a morgatge at a bank with a conventional 30 yr at like 5-6 % interest. (I am not sure that is how it all works) but my question is how much/were does my private money lender make money if they loan me the money for 1 yr and then i am able to get a bank to refiance for me. do they just get the 8-12 % interest on x amount that was borrowed for the 1 yr-until i get a bank to refiance me? Sry if i am vague i am very new to the process, and want to understand private lending. I have a rental but never using someone elses money, i used all my own and never want to do that again. Any advice would help a lot!
Steven