Question about private money, hard money and bank loans.

[Michael Bishay]

Hello all, 

I had a question about a strategy I see all over the internet where people raise money from a "Private lender" form the down payment on a property and then the rest they raise either from the bank or from a hard money person.  

Are there really people that lend the initial finds for a property? Why would they be incentives to do that being that it would only be like 10-20% of total cost? 

Am I understanding this correctly?  

Sorry for the novice question, I'm still new to this game and this site has bees super helpful!