Sponsor wants 124k of my 310k contract deferred to closing

You've written down that a fourteen month hold breaks you and then written down that you want the job. Those two sentences are the whole decision and the paperwork is downstream of it.

What's behind you in the capital stack? If he's got hard money at 2.1M and an equity partner and now you, you're last in line at closing and your 124k comes out of whatever's left after the lender and the commission and the transfer costs. If he has to cut the price 300k to move it, does your 124k survive that? I'd want to see the payoff waterfall on paper before I priced anything.

The lien piece is where I'd spend tonight. Mechanics lien deadlines run from the last date you furnished labor or materials, and both the timing and the notice requirements vary by state, so a deferred payment can walk you past your filing window without you noticing while you're being patient. Get your state's deadline from a construction attorney and put it in your calendar the day you finish work, not the day he says he'll pay.

The other thing to read is his construction loan documents, specifically any clause requiring unconditional lien waivers from subs before each draw. If his lender demands a full waiver at the draw that includes your deferred amount, you can end up signing away the exact rights you're negotiating for. Ask him to send you the draw request package and the waiver form he uses. If he won't, that's your answer on how the rest of this goes.

And if he does agree to a secured note, secured by what and in what position matters more than the 10 percent.

Agreeing with @fathom on position. A note secured in third position behind a hard money loan and an equity piece is a document that describes a hope.

Things I'd want in the draft, and a construction lawyer in your state should write the actual language:

A maturity date independent of the sale, as you said, so it's a loan with a deadline rather than a contingency.

A personal guaranty from the sponsor. If he believes the timeline he's selling you, this costs him nothing.

Interest accruing from the date the deferral starts, not from maturity.

A clause requiring your written consent before he refinances or subordinates ahead of you.

On the 355k option, pricing the risk into the number is cleaner and most sponsors will negotiate that down rather than sign a guaranty. The version I've seen work is both, a modest premium plus the guaranty, and you accept that you're one of several people waiting.

I'd do the diligence on the sponsor before the diligence on the document. Three things I'd ask him directly: when does his loan mature, has he extended already, and what's his current all-in against his target price.

If his loan matures in seven months and his all-in is 3.05M against a 4.6M target, he has room and a clock. If he's already extended once and he's at 3.4M, then his "budget got tight" is a symptom and your 124k is the cheapest money available to him, which is why he's asking you and not his lender. The foundation surprise is worth asking about specifically. What did it cost and what else did it push out of the budget besides your last third.

What's worth pricing out is what 124k does for you if you keep it. That's most of a quarter of payroll and it's the difference between choosing your next three jobs and taking them. You'd be swapping that for a position behind a lender and an equity partner on a house that may need a thin slice of buyers to show up on schedule.

I'd rather quote 355k, be told no, and lose a job I couldn't afford to win.