A hard money/private mortgage loan is a secured debt obligation that produces a regular, predictable income stream to the investor with all the security, protection and recourse that a mortgage lien provides.
Unlike stocks or other equity investments, the security in a hard money loan is the actual bricks and mortar of the real estate, further backed by title and hazard insurance. Private mortgage loans are also secured by personal guarantees from the borrowers, adding another layer of protection for the investor.