I use a rubber bands around my bills, then deposit them in my mattress for safe keeping.

If the contractor asks you for a 50% deposit (which you should argue against), that's entirely on you; your lender will not front that money.

I don't see why it would be a problem but playing devils advocate, maybe the rental manager would rather wait for a finished project to show rather than an undergoing project only because perhaps someone does not like the aesthetics of the bathroom (tiles, vanity, etc) after they've committed to the rental (security deposit, tenant screening, etc).  

Deposit into the Account of 100 Main Street, LLC.

Yes, you can likely back out and get your deposit back based on ANY inspection even a good one, but its disingenuous to operate that way. 

The second you advertise a contract people will throw their deposit money at you before they even look at the house.

They will look at the house after the deposit is paid.

2) We require a non-refundable earnest money deposit of $1000 (depending on your deal) to be placed with our title company if you decide to purchase the property?

Now, our seller broker does want to give us our earnest deposit check back because she claims we are on default.

If not, my guess would be you’re likely going to have to return their deposit.