Map Guide

PIN COLORS (Exit $/SF)

DEAL STATUS DOTS

OTHER MARKERS

Adjust the Assumptions tab (highlighted in orange) to reprice all pins in real time with your own inputs.

What is SB 1123?

SB 1123 (signed 2024) allows by-right subdivision of single R1 and multifamily-zoned parcels into up to 10 fee-simple lots without discretionary review. “By-right” means no planning commission hearings, no neighbor appeals, no conditional use permits — the city must approve ministerially if the project meets objective standards.

Lucid Urban’s Strategy

We acquire directly from homeowners at pre-SB 1123 pricing — before the market has repriced for subdivision potential. We subdivide, build attached townhomes, and sell fee-simple lots to end buyers. Each deal targets a 40%+ IRR and 2× MOIC on a 24-month hold.

Fee-Simple Lots

Unlike condos, fee-simple buyers own their land outright. No shared ownership structure, no master HOA over the land. This is the same ownership structure as a single-family home — the most liquid and fundable product in the for-sale market.

All-In Cost Build-Up

All-In $/SF = Total Project Cost ÷ Total Sellable SF

Exit & Spread

Exit $/SF is anchored to T1 (new construction / fully remodeled) comparable sales in the same ZIP, filtered by condition tier before any size adjustment. Spread = Exit $/SF − All-In $/SF. This is the gross margin per sellable square foot before LP waterfall.

IRR and MOIC are shown at the deal level in the deal card and reflect LP economics after preferred return and promote. See deal cards for deal-specific figures.

Why Condition Tier Matters

Raw $/SF variance in SFV ZIPs runs $425–$911/SF. The single biggest driver is condition — new construction and fully remodeled homes (T1) trade $200+/SF above unrenovated existing stock (T2). Blending T1 and T2 comps systematically underprices new construction exits. We isolate T1 comps before any size adjustment.

Tier Definitions

Size Adjustment

Within T1, we size-adjust comps to the subject unit’s average SF using a local $/SF-vs-size regression. Smaller units trade at a premium $/SF; larger units compress. We do not blend across condition tiers before this adjustment.

When BTR Applies

Build-to-Rent (BTR) is modeled as a secondary exit strategy for markets with strong rent fundamentals. It is not our primary strategy — the for-sale exit typically produces superior returns. BTR viability is constrained by DSCR: at current market rates and 65% LTV, most deals do not achieve 1.25× DSCR, which sets the cap on permanent loan proceeds and therefore on equity return.

DSCR Mechanics

DSCR = NOI ÷ Annual Debt Service. We require ≥1.25× for a BTR deal to be considered viable. At 6.5% I/O permanent financing and 65% LTV, the DSCR constraint back-calculates the maximum sustainable NOI — which in turn caps the rent required to make the deal work.

Rent Methodology

Rent estimates use empirically-derived premium factors per ZIP, triangulated with HUD Small Area Fair Market Rents (SAFMR). Three scenarios are modeled: conservative (10th percentile), base (median), aggressive (75th percentile). The BTR card on each deal shows all three.

Zone Eligibility

SB 1123 applies to parcels where residential use is permitted as-of-right. Priority stack: R1 and MF zones are directly eligible. Commercial zones (CR, C-1, C-2) are eligible where residential use is listed in the zone’s use table. C-4 is a gray zone requiring parcel-level verification. C-5 and CM are ineligible.

VHFHSZ Exclusion

Very High Fire Hazard Severity Zones are a statutory hard exclusion under Government Code §66499.41. No city or county can waive this. Parcels in VHFHSZ are excluded from this map and cannot be SB 1123 projects regardless of zoning. This is not a local policy — it is state law.

Lot Size

SB 1123 requires a minimum lot size sufficient to create the proposed number of lots. On lots under 14,000 SF, the 1.25 FAR floor binds before the 1,750 SF average unit size cap — meaning full-size units may not be achievable on small lots. Breakeven for full-size units is approximately 14,000 SF.

What Off-Market Means Here

We acquire directly from homeowners before the property is listed, at prices that reflect current use (typically a single-family home) rather than SB 1123 subdivision potential. Most homeowners are unaware of SB 1123 or its value impact on their parcel.

How Discount is Estimated

Estimated market value is derived from LA County Assessor data (assessed land + improvement value), time-adjusted to current date using ZIP-level appreciation rates. Off-market discount = (Est. Market Value − Max Offer) ÷ Est. Market Value. Pins with insufficient data to compute a reliable estimate are ghosted.

Why This Matters

Acquiring at pre-SB 1123 pricing is the core of our return model. The spread between acquisition cost and exit value is only achievable if we buy before the market reprices. Direct-to-homeowner outreach and speed of close (no listing process, no competing bids) are our structural advantages.

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Build-to-Sale

Build-to-Rent