What are the best states for buying a CRE with NNN lease?
I am new to commercial real estate investing. What is a good criteria to identify the best states for investing in a NNN lease property? 

A friend said Texas, but I am curious what other states I should be looking at?
[{"id": "i1mm43r", "text": "Look at local taxes and look at it at a state, county, and city level.  Some have higher income taxes and you will be taxed in the municipality your investment property is in.  It may be possible to pass these income taxes through in the NNN but a savvy tenant will argue that.  Second, look at tenant/landlord law.  As a landlord you want to look for landlord-friendly municipalities, not  cities/counties that allow tenants to not pay rent without getting evicted - some of this is due to Covid moratoriums.  Also try to target areas that may be experiencing growth.  Getting a solid income stream from your property is good, but if *the property value* doubles or triples + in value over 10 years because the real estate in the area appreciating as the area experiences growth - that's what it's all about.\n\nTexas may be good.  I'm not there, but people from my state are moving there.  It doesn't have income tax and seems business friendly. I've also heard North Carolina and Idaho but this is just chatter from talking to investors.", "replies": [{"id": "i1nsdon", "text": "Thanks for a detailed answer. \n\nI was told that that in commercial real estate all asset appreciation is based off of cap rate. So, unless the rent increases, there is no asset appreciation since cap rate will remain the same. Is that true?", "replies": [{"id": "i1obvs6", "text": "I\u2019m not the person you replied to but cap rates almost never remain the same as they are influenced dramatically by the other terms of the lease (predominately the length of term remaining), as well as market factors like interest rates, supply/demand, and asset classes movies in and out of vogue. If you buy a long term lease NNN asset with a flat least structure at a market cap it will be challenging to sell it for more than you pay unless you can restructure a new long term leases at expiration of the existing term. Historically that last sentence hasn\u2019t always been true, and obliviously it\u2019s possible cap rates could compress further by the time the lease expires but I think most would agree it is unlikely.", "replies": [{"id": "i1r2ws0", "text": "What they said and also buying real estate based on a cap rate and buying real estate because it is good real estate are different things.  You could buy a Valvoline at a 7% cap, but it's such a unique property that you won't be able to lease it to anyone else other than a quick lube service company.  However, if you buy a little industrial park or strip center you will have multiple people who would lease it.  If you want to sell and even if it's vacant, there is a bigger pool of owner occupiers that would buy it.  Level this up and let's say this industrial park or strip center is in an area that is in the *path of progress* and not only rents may increase but you may be able to not put a dime in the property and the land ends up being worth more than the building because a lot of kids with man buns and butch haircuts with names like Artemis and Kaylee are moving to the neighborhood who don't mind living in ultramicro apartments.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i1mxz60", "text": "No\\_Artist touched on a number of good points for you to look at. The main points of emphasis are income tax and appreciation for the asset, for my personal goals. For example Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming are all states without income tax, but not all of those states have the same appreciation as say California. Florida sounds great because there is no income tax, but what if the property is located along the coast and gets destroyed during a hurricane? While it may be the tenants responsibility to rebuild the structure, you may not collect any rent for a couple of years. My sister is in Louisiana and they still have Wendy's and other QSR properties that still haven't been rebuilt from the last hurricane they had.\n\nOne other thing to consider is, CAP rates have compressed throughout the entire US. What this means is, I have seen new Taco Bell NNN leases in Oklahoma offered at a 4% CAP as well as seeing them offered at the same CAP in CA. I'd take the CA opportunity versus the OK one because appreciation is crap in OK....this is just one example.", "replies": [], "depth": 1}]