The GC wants 35 percent at signing on a first private lending draw schedule

Delivered and installed are different line items on every inspection form I've seen, and a decent inspector photographs both. What they usually won't do is count studs. They'll note "windows on site, 12 units" and move on. If the specific worry is theft, the answer is scheduling deliveries close to install dates rather than an inspection policy.

Mostly a question, since new lenders often stall exactly at this point. Is the 35 percent unusual for the size of the job, or unusual because you're a lender rather than the homeowner? A typical owner-occupant quote often runs closer to a third down as well, with the contractor citing the same reasoning. Worth knowing whether the investor-rehab norm is genuinely different or whether flippers simply carry more negotiating leverage.

The two questions in your post have different answers.

On the deposit, contractor deposit limits are set by state law in several states, and some cap residential deposits at a percentage of contract price or a flat dollar amount. Whether a 35 percent deposit is even permitted on this contract depends on the state and on whether the work counts as residential home improvement under that state's statute, so confirm it with a construction attorney licensed there before you write it into your loan documents.

On protection, direct payment to a supplier does two things. It ensures the money buys materials, and it creates a record that reduces the chance a supplier files a lien for nonpayment on materials you already funded. Requiring conditional and unconditional lien waivers from the GC and from every supplier and sub paid above a threshold is the more useful mechanic. Waiver forms, notice deadlines, and who is entitled to lien vary by state, and in some states an unpaid sub can lien even where the owner has paid the GC in full.

The economics of the deposit request are worth taking seriously rather than dismissing. Materials cost pressure is real, tariffs on steel, aluminum and lumber have raised input prices, and suppliers tightening terms from net 30 to net 15 is a genuine cash squeeze on a small crew. A contractor who cannot fund materials cannot start, and capable crews are scarce enough that they can pick clients who pay on order.

The assumption your structure depends on is that the GC has enough working capital to carry roughly three weeks of material spend. If he does not, inspected-draws-only will either lose you this contractor or produce a job that stalls between draws.

The 6am truck line made me laugh, and then I remembered a neighbor had an entire pallet of hardwood taken off a driveway. Delivery timing seems like the real control.

From the GC's side of this. Thirty five percent at signing on a $95k rehab is high and pushback is fair, but zero at signing is a non-starter for a contractor of any size. On a job that scope, $18,000 to $25,000 of long lead items typically get bought in week one, cabinets, windows, appliances, plus dumpster and permit fees. Fund that out of pocket with the first inspected draw twenty five days out, and the GC has effectively financed the project for a month at whatever their card charges. The direct-pay-to-supplier structure is the one worth signing. It should include permits and the dumpster too, since those are cash out on day one and aren't materials.

@angela_burke is right about the day-one costs, and that's the piece lenders often leave out of the schedule. One more thing worth adding: 10 percent retainage across all five draws held to final on a job this size can mean $9,500 of profit sitting with the lender for four months. On big commercial that's normal. On a $95k rehab it's most of the margin, and it's why some good crews decline the job outright. Retainage that steps down, 10 percent early and 5 percent on the last two draws, keeps the protection without pushing the crew into the bank.