Technically, when owners take investor money, they obligate themselves to pay investors back whenever there is a financing event or the owner decides to repurchase the option from investors. Owners repurchase the option from investors out of the proceeds of the value of the home when owners either sell or refinance (there is the possibility to repurchase the option from investors with funds from other sources as well).

Note, this is not a debt, you are purchasing a portion of an option to own real estate. You are purchasing a partnership interest in a company that is specially created for this purpose and co-issues with the homeowner. This company is known as a Crowdfunding Vehicle which is a conduit for investments in the owner’s Options Contract and allows for all investors to be represented as one single investor on the document. The Crowdfunding Vehicle signs the Options Contract on behalf of all investors and investors who then own stock in the Crowdfunding Vehicle. Investors will have an ownership portion in the Crowdfunding Vehicle and therefore in the Options Contract proportionate to their investment.