An example of this would be mixing your personal money and LLC money in the same bank account.3.

I've never heard money/profit described as cute, so it's not important.The most important thing you mentioned, was the rent potential and ARV. 

You obviously don't get the tax benefits of real estate, but if you're just looking for "returns", then lending your money out could be advantageous for your goal.

And she's hardly saving money if she's using an electric space heater as the only source.

Since you can't control the sale price, you basically have a $4k cushion to your reno costs, or otherwise you lose money compared to the as-is scenario.

You don't have to do anything with the money and there's no time limits or anything.2.

When my business partner and I were still flipping we bought a couple through Auction.com and we always used a private money lender to fund those and our other flips. 

Real estate investing is forgiving; the average person can still make money even with some big mistakes.

you may have to save up until you have enough money to do so - down payment, closing costs, reserves, etc.House Hacking: What Is It, How to Start, and Strategies for Successit's a more powerful way to get started. 

This is true for all private money lending situations..