HOME EQUITY is an instrument where you use your home as collateral to obtain a loan. The lender ensures that if the borrower fails to pay the debt the home could be used for a foreclosure in a public auction to recover the amount lent to the borrower. Home equity is use for different purposes like debt consolidation, medical bills, education etc. some time people use it for investments in property.
Investment in home equity can be done on shared basis as well. There are individuals who invest in real estate. Different people do it for different purposes. Some people do this on share basis. In order to help a family member or friend and to gain some profit people do get into buying a new home. This would help their family members or friends get a home and they make profit in terms of investment and tax deduction is added benefit. Investors especially those with lesser financial obligations like people with adult kids are considering realty for investment.
 In this sort of treaty, there is an agreement between two parties, an investor-owner and an occupier-owner. The former ensure cash for partial or total down payment for that house. Once it is purchased both the parties have an ownership on it. The person who is living in the house and is the second party in that treaty, the occupier- owner has to  pay a fair amount of rent so that the investor owner could ensure the right to occupy the property for tax deduction purposes. The investor owner can use the amount he got as a rent for any purpose ranging from mortgage payments to property tax. This agreement has a definite life span which may vary from 3-10 years. After this lifespan both the parties have a right buy the property. This property can be sold with the proceeds divided in between the parties or the loan term should be extended.
  There is an element of advantage for both the parties. When the property is sold at the end of the deal’s term, the investor owner gets dual benefit of original down payment being repaid to him and the share of proceeds from the sale of the property. Tax write off on the expenses and tax deductions because of depreciation are added benefits for investor owner. The owner occupier gets benefit of deduced mortgage interest and property tax on his income tax returns. They also get a benefit of exemption from capital gains if they have lived in that property for at least two years out of the past five years.
There are some risks attached to it as well. If the occupier owner fails to make payments or if he defaults on the mortgage, it could force the investor owner to foreclose the property. This in turn would result into heavy losses from the pocket of investor owners as it is a lengthy and costly process. Also if the property depreciates the investor owner would be at loss as he would get less or say just his down payment back.  There is a possibility that the occupier owner could ignore the maintenance of the property that would result into property being less attractive to a buy when the agreement ends.