How does Private Investing work?

[Eddy Rios]

I am completely new in this industry but I am wondering how hard money and private investing works for flipping. Is the process the the same or can they be the same? Any major drawbacks or is it easier than it sounds? I would like insight from people with experience instead of a "Google search". 

Any advice helps! 

Thank you in advance!!

[Dominic Mazzarella]

Hard money and private investing are both ways to finance flips, but they work a little differently.

Hard money loans are typically from companies or private lenders that specialize in short-term, high-interest loans. They’re asset-based, meaning the loan is secured by the property itself, and they often have quicker approval times but higher interest rates (think 10–15%) and fees. These are great for experienced flippers who can handle the tight timelines and costs.

Private investing usually involves individuals funding your deal, like friends, family, or networking connections. Terms are often more flexible and negotiated case-by-case. Rates and expectations vary depending on the relationship and the investor's comfort with risk. The drawback is you need to build trust and relationships upfront.

Both have their place, but private money tends to offer more flexibility, while hard money is more structured and accessible if you lack personal connections. If I were in your shoes based on what you told us, I'd probably avoid hard money loans right now. There's a lot of pitfalls there that you're probably not going to be aware of without experience.