I know in my area that agents will sometimes develop that relationship to help if the market in not favorable to whatever type of transaction they are trying to make, rolling it into PM and then pulling it out later when the market has turned favorable again.

Note this will be protect or in favor of the GC more than the client.

Based on projected costs, you may find this article helpful in gauging how much to set aside over the long haul.I acknowledge that it's tempting to lock in debt at today's favorable terms.

It won't be the crazy wild west like last time, but interest rates and property values can only go so high before the supply surpasses the demand and the market shifts into the favor of buyers and sellers start competing with each other by lowering prices.You could purchase a small multifamily property here in Sacramento for $300k or less, see a positive cash flow of $500 per month, have the tenants pay the down the property for you and still make money when you sell it in a couple years at the peak of the market.

Not sure about you, but I wouldn't want to roll the dice on whether or not a judge would decide in favor of it if something went wrong.

Just thoughts...and I hope this matter gets resolved in your favor. 

I don't feel like my intentions would be purely in favor of my client.

Not to mention that since you will be buying more property, your credit score will be favorably affected by decreasing your consumer debt and showing your ability to repay.  

I began to quickly see that with real estate, the "cards are stacked in your favor."

Puts the PM in a very bad spot.There are arguments to be made in favor of either side controlling the deposit.