How do I backup with TimeMachine to my External Hard Drive through iCloud?

I have connected my external hard drive to my iMac and it has Back to My Mac through iCloud enabled. On my Laptop I have been able to access the iMac through the shared computer section of the Finder and then mount the external hard drive to my machine. In Time Machine preferences I have selected the disk that I mounted and it shows me the name in black and below it iMac in grey. However when it goes to back up it gets an error and says the Backup disk is not available. What do I need to do to make the disk available?

Thanks!