I personally usually request a 30 percent minimum down and a payment schedule where I get paid as I complete certain project milestones.

So far I have gotten by pulling building permits the last 10 years with graph paper and walk through inspections with the building official.  

Here's a graph to help you grasp the concept and understand where we are currently at:Currently, Sacramento and most of California is somewhere between an early and late stable market.

So many contractors are living paycheck to paycheck, so they probably want money right off the bat because they need money to live off of until the first milestone (obviously, not a good sign).If you get a bad vibe, go somewhere else.  

That's where writing down goals and milestones on the way to accomplishing those goals is key- you can see visually when you have done one task and made progress towards the goal. 

You should have them break down each trade and milestone, such as demo, rough electric, rough in plumbing, flirting, painting, etc.

We both had incredibly strong Decembers and are on pace to do well in January as well; right around 2004 numbers if I recall the graphs correctly.We have entered our first technical sellers market since the crisis and are experiencing some pretty incredible absorption rates in the lower price points ($80-120k or so).

If the loan amount is large you may want to have draw downs at certain construction milestones upon inspection.  

@Mike D'Arrigo that graph is excellent.

But if you look at that graph above of average national house prices (from Case-Shiller HPI), there’s a very obvious troubling matter.