NFA loans?

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  • rob-cubed

    In need of moderation
    Sep 24, 2009
    5,387
    Holding the line in Baltimore
    Probably a silly question, given how most banks are happy to distance themselves from anything gun-related BUT: is anyone out there loaning money to purchase NFA items?

    With the cost of an M16/AKM machine gun running as much as car, the only way I could afford one short of selling an internal organ would be to take out a line of credit. Seems like it would be a safe bet for a loan, using the item itself as collateral. Of course, repo if needed would be a PITA although I'd wager most of us playing in the NFA world have a stable job and decent credit.

    There are banks out there that specialize in collector niches like vintage cars, airplanes, whatever. Seems like there would be a thriving if small market opportunity there for the right investors.
     

    BigDaddy

    Ultimate Member
    Feb 7, 2014
    2,235
    From the viewpoint of the bank, there are a lot of obstacles in the way of repossession if you default. Finding it and getting a tax stamp, being two of them.
     

    IMBLITZVT

    Ultimate Member
    Apr 20, 2009
    3,799
    Catonsville, MD
    I have seriously considered doing so in the past. However I never did try. I have a little money in the family I could probably borrow from before going to a bank. However I would be interested to see how it goes for you. I say give it a try! I have heard of people getting loans on them before but no first hand knowledge.
     

    smdub

    Ultimate Member
    MDS Supporter
    Nov 14, 2012
    4,644
    MoCo
    Heck w/ a simple loan. I'd like to find a place that will let me apply for an NFA margin account ;)
     

    aaronn

    Active Member
    Aug 8, 2013
    268
    Baltimore
    Yeah, as mentioned above, repo would be too difficult. It would really be a personal loan with the item listed as collateral just to make the underwriter feel better.

    With a car, there's a title for the creditor to mark, and with a house there are land records to record in. There's no actual title for an NFA item.
     

    IMBLITZVT

    Ultimate Member
    Apr 20, 2009
    3,799
    Catonsville, MD
    If you can work with the seller, they may allow you to spread the payments over the transfer period.

    Yeah I did that before. 2/3rd down, 1/3rd on approved form 3. I had all the money up front but wanted to keep some around for Christmas to be sure I did not come up short.
     

    rsideout

    Senior Member
    MDS Supporter
    Dec 11, 2009
    6,708
    MD - Capital Region
    Yeah I did that before. 2/3rd down, 1/3rd on approved form 3. I had all the money up front but wanted to keep some around for Christmas to be sure I did not come up short.

    I'm doing something similar with an MG that I'm selling instate. 1/2 down and the balance spread out in payments over 6 months, or before transfer. That structure helped the buyer, a friend, be able to do the deal and join the full auto club.

    That said OP, how much do you need and what are you willing to pay in interest? :evilgrin3
     

    6-Pack

    NRA Life Member
    MDS Supporter
    Jan 17, 2013
    5,647
    Carroll Co.
    I'm generally against second mortgages (home equity lines of credit) for non-essential purchases, but you can get a HELOC to get the cash to buy the NFA item.

    With HELOCs, the banks don't really care what you use the money for, as they'll just foreclose on your house if you default on the loan.
     

    Name Taken

    Ultimate Member
    Feb 23, 2010
    11,891
    Central
    This sounds like a really really really really REALLY poor financial decision.

    I tend to agree.

    All you need is one poor legislative session and they are A) Illegal to be transferred B) Illegal to possess C) Must be turned in D) NFA might get overhauled where Post samples would be allowed

    Any of these events would INSTANTLY drop the market.

    At the end of the day convincing yourself toys are investments is typically poor handling of money. One good or one bad legislative session and all the money you didn't have to begin with is gone.

    Now if you HAD the money sitting around and wanted to hedge your bets a bit sure. Then it's no different then buying stock, bonds, or CD's.


    Would any logical investor urge you to take out a second mortgage on your home to buy Ford or Apple stock? If they did would you fire them?
     

    rob-cubed

    In need of moderation
    Sep 24, 2009
    5,387
    Holding the line in Baltimore
    The biggest risk now is: are we in a MG bubble or not? The way costs have been rising in the past few years, it seems very possible. But, the rise in cost pre-recession was a similar trajectory and prices only nudged down slightly during the financial panic.

    There is always risk investing in anything. I think the likelihood of further legislation around MGs is unlikely. They are already so expensive, they may as well be banned... the antis already got what they wanted.
     

    SWO Daddy

    Ultimate Member
    Jun 18, 2011
    2,468
    Probably a silly question, given how most banks are happy to distance themselves from anything gun-related BUT: is anyone out there loaning money to purchase NFA items?

    With the cost of an M16/AKM machine gun running as much as car, the only way I could afford one short of selling an internal organ would be to take out a line of credit. Seems like it would be a safe bet for a loan, using the item itself as collateral. Of course, repo if needed would be a PITA although I'd wager most of us playing in the NFA world have a stable job and decent credit.

    There are banks out there that specialize in collector niches like vintage cars, airplanes, whatever. Seems like there would be a thriving if small market opportunity there for the right investors.

    Good luck with anything other than an unsecured loan.
     

    rem87062597

    Annapolis, MD
    Jul 13, 2012
    641
    Ehh... not really MGs are very easy to sell if anything comes up and you need to dumb it to repay the loan. You could likely buy and resell a MG in the same day with a 5-10% loss at worst case.

    If you look at it as an investment vehicle, you'd be getting loaned money so that you can invest it in a MG. That is a huge red flag regardless of the investment vehicle.
     

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