# Chapter 01: Operating Wheel & Control System

## 1) Purpose
Define the company’s core operating model as a repeatable closed-loop system that converts land sourcing into stabilized occupancy and recapitalization, then reinvests capital into the next cycle.

## 2) Scope
Applies to all active and future developments, including land procurement, modular production, site execution, lease-up, refinance/takeout, and reinvestment planning.

## 3) Core Operating Model (Wheel)
The company runs as a **continuous operating wheel**:

1. Land is sourced, procured, and entitled
2. Legal closes land and structures project entities/contracts
3. Plant manufactures modules
4. Logistics + field teams deliver, set, connect, and complete final MEP
5. Management leases and stabilizes to HUD standards
6. Legal closes HUD refinance/takeout
7. Capital is recycled into next land pipeline

This cycle repeats by project and phase.

## 4) Central Hub: CPA + Accounting (Non-Negotiable)
Accounting/CPA is the central control hub across all spokes.

### Required responsibilities
- Weekly reconciliation cadence (minimum)
- Entity-level books and intercompany accounting
- Job-cost tracking by project and by division
- Development vs Plant vs Management P&L separation
- Cash movement controls and audit trail
- Tax-impact review before/after major transactions
- Monthly board-ready finance packet

### Operating model recommendation
Use a **hybrid structure**:
- Family-office speed for leadership decisions
- Corporate-grade controls for finance, legal, compliance, and reporting

## 5) Division Roles

### Land Division
- Identify target parcels
- Underwrite and procure sites
- Manage approvals: city, engineering, infrastructure
- Deliver construction-ready handoff package

### Legal Division (Acquisition)
- Close land transactions
- Structure entities and key agreements
- Maintain title/compliance package

### Plant Division (Efficiency)
- Coordinate raw-material planning
- Produce modules in-factory
- Track throughput, quality, and cycle time

### Logistics Division
- Move materials to plant
- Move finished modules to site
- Coordinate transport sequencing and delivery windows

### Field Execution Division
- Crane set on slabs
- Module connection and completion
- Final MEP tie-ins (plumbing/electrical)
- Punch completion and turnover readiness

### Management Division
- Lease-up and occupancy growth
- Operate to HUD qualification standards
- Stabilize operations for refinance readiness

### Legal Division (Refinance)
- Execute HUD close/takeout
- Coordinate payoff and refinance documentation
- Finalize legal closeout for capital recycle

## 6) Governance Layer
Board + leadership oversee the wheel with monthly and quarterly controls:
- Capital efficiency
- Cycle-time bottlenecks
- Risk and compliance
- Resource allocation shifts
- Strategic sequencing of projects/phases

## 7) KPI Framework (Minimum)
- Throughput/cycle time (plant + field)
- Cost per door
- Schedule variance (planned vs actual milestones)
- Quality/rework rates
- Lease-up velocity and stabilization timing
- Refinance readiness and capital efficiency

## 8) Cadence & Meeting Rhythm

### Weekly (Operating)
- Reconciliation and cash movement review
- Project status by division
- Blocker log + owner + due date

### Monthly (Executive/Board Packet)
- Entity-level P&L + intercompany summary
- Project lifecycle status and risk dashboard
- Capital in/out and next 90-day decision queue

## 9) Controls Checklist (must-have)
- Chart of accounts aligned by division
- Intercompany transfer policy
- Approval matrix by dollar threshold
- Contract and close checklist by stage
- Refinance readiness checklist
- Document retention and audit support standard

## 10) Revision History
- v0.1 — Initial draft from Tracy operating model input

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— Added by Tracy Assistant, 2026-03-19