I had my own construction company for a few years. My view is that you've got to make $X every day to stay in business.
You can make it on high labor rates or make it with lower labor rates and mark ups on materials. Either way, you can't afford to walk away with less in your pocket.
Asside from the PITA factor of depending on the HO to have what you need on site when you need it, letting them buy materials CAN'T effect your take home. If you don't get to mark up materials, your labor rate had better double or you're only working for wages. If you want to work for wages, you're better off doing it for someone else who can provide insurance, a vehicle, health benefits, holiday pay, sick time, and money for warranty service. You can't work for wages and pay for all these "extras" for yourself.
If you let the HO buy materials and give up the markup, you're getting taken advantage of.
