NNN Investing for California-Based Investors
California is home to some of the most sophisticated real estate investors in the country — and some of the highest state income tax rates. For California-based investors, the tax advantages of NNN investing and 1031 exchanges are particularly powerful, because capital gains in California are taxed as ordinary income (up to 13.3% state rate, on top of 20%+ federal).
A California investor selling a $3M appreciated property might face a combined 37%+ tax hit on gains. A properly executed 1031 exchange into a NNN replacement property defers 100% of that liability — often for decades, and potentially forever through stepped-up basis at death.
The ESS Group: Beverly Hills' NNN Specialist
The ESS Group is headquartered in Beverly Hills, California, and has served Los Angeles-area investors since 2008. Founder Eli Satra Shans is a CA-licensed attorney and real estate broker with 450+ NNN transactions and $900M+ in closed volume — the track record of a national firm with the personal service of a boutique practice.
The ESS Group serves California investors acquiring NNN properties nationwide. California's investment community includes a disproportionate share of wealthy private investors, entertainment professionals, and technology executives — exactly the accredited investor profile that NNN investing is designed to serve.
Why California Investors Choose NNN for 1031 Exchanges
For California investors, the 1031 exchange into NNN is particularly compelling for several reasons:
- Escape California taxation on gains: By exchanging (deferring the taxable event), California investors delay paying state capital gains tax indefinitely
- Diversify geographically: California real estate is priced at 3–4x the national average. NNN properties in Texas, Florida, Georgia, and Tennessee offer dramatically higher cap rates on the same investment dollar
- Reduce management burden: Many California investors own multifamily or commercial property they manage locally. NNN offers nationwide diversification with zero management obligations
- Cash flow enhancement: Swapping a 3% cap rate LA property for a 5.5% cap rate NNN property can dramatically increase monthly income on the same equity basis
Where California NNN Investors Should Be Looking
While California has limited NNN inventory relative to other states (high land costs compress cap rates), the best NNN opportunities for CA investors are often in Sun Belt markets where The ESS Group has the strongest developer relationships:
- Texas (Dallas, Houston, Austin, San Antonio): No state income tax, strong population growth, favorable landlord laws, high NNN transaction volume
- Florida (Tampa, Orlando, Jacksonville, Miami): No state income tax, retirement demographic driving retail demand, strong Dollar General/Family Dollar markets
- Georgia (Atlanta, Savannah): Major logistics hub, rapidly growing suburban markets, strong QSR demand
- Tennessee (Nashville, Memphis): No state income tax, growing population, strong new construction NNN pipeline
The ESS Group's California Legal Advantage
Because Eli Satra Shans is a California Bar member, he can provide legal representation to California-based investors throughout a NNN transaction — regardless of where the property is located. This means lease review, entity formation, escrow management, and title review are all handled by your attorney, not contracted out to a local firm you don't know.
For California investors doing 1031 exchanges into out-of-state NNN properties, this creates a seamless experience: one call, one advisor, one bill. No coordinating between your California attorney and your Texas broker. The ESS Group handles it all.
Contact The ESS Group in Beverly Hills
The ESS Group serves accredited investors throughout California and nationwide from its Beverly Hills headquarters. Whether you're looking to sell a California investment property via 1031 exchange into a NNN replacement, or simply wanting to add NNN passive income to your portfolio, Eli Satra Shans is available for a direct conversation. Contact us today to access our current off-market NNN inventory.
Ready to Invest?
Our advisors specialize in sourcing premium off-market NNN properties for high-net-worth investors and 1031 exchanges. Contact The ESS Group to see available inventory.