NFA loans?

The biggest issue I have had with investing in full auto is a place to shoot. Not many ranges will let you go rapid fire semi auto much less full auto. I've even known people to go full auto on 20+ acres of their own property just to have the police show up because of neighbor complaints. As far as an investment, there aren't many folks that make a lot of money on full auto items unless they have sat on the guns for 15-20 years. As the Pawn Stars say " that might have been the asking price, but what did it really sell for?"

rem87062597 said:

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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That's my point.

If your investor told you to take a second mortgage on your house to buy Ford stock at 2.09 like it was in 2008 promising you it would go to 24 like it did a few years ago would you fire him?

If you have the money laying around and want to "gamble" it's no different then the stock market or investing in a start up company. But to spend money you do not have to try and make it big in the NFA world or by convincing yourself a toy is an investment then you really need to reevaluate your money.

Long1MD said:

The biggest issue I have had with investing in full auto is a place to shoot. Not many ranges will let you go rapid fire semi auto much less full auto. I've even known people to go full auto on 20+ acres of their own property just to have the police show up because of neighbor complaints. As far as an investment, there aren't many folks that make a lot of money on full auto items unless they have sat on the guns for 15-20 years. As the Pawn Stars say " that might have been the asking price, but what did it really sell for?"

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If you are buying it for an investment and do not have the cash to replace it then you shouldn't be shooting it.

What happens if you have a catastrophic failure and your 16k dollar is a pile of parts?

If you don't have the money to replace it it should be sitting in the safe. I'm not sure how insurance would work on a 16k dollar machine gun.

Name Taken said:

If you are buying it for an investment and do not have the cash to replace it then you shouldn't be shooting it.

What happens if you have a catastrophic failure and your 16k dollar is a pile of parts?

If you don't have the money to replace it it should be sitting in the safe. I'm not sure how insurance would work on a 16k dollar machine gun.

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I completely agree, and if you're just buying it and throwing it in a safe for an investment you're further reducing supply in a market dictated by low supply and high demand while not even enjoying the benefits of the gun. It's bad for the rest of us who would actually enjoy it.

Just buy some index funds.

Name Taken said:

....
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?

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NFA has been stable since 1984. That is all but 2 years of my life. It might change but the so much in the world could change too... The country could also fall apart making your MG possession priceless... Who is to know but its not a crazy idea that nothing will change. I mean my Father is convinced I should get rid of my 401K because the Government is going to do a one time tax of like 10-20% for whatever reason. Its not like money in the bank is safe either.

I think like most guns, they are not strictly investments as you do get enjoyment out of them. There is also security in them (and all guns) that goes beyond money.

Yes, plenty of people took a mortgage to buy a house a few years back. Worked out well for many, not great for those at the end. So you certainly should not borrow money without real thought. However there are other factories other than a strict investment here too... After all a Car or boat is a horrible investment and people take out loans on them all the time.

Put it this way, the NFA has been much more stable than the stock market since 1984...

ericoak said:

If you took out a 12K loan 3 years ago to buy an m16, your gun is now worth 16-18K. You think interest costs more than that?

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If you took out 16K three years ago, you would be looking at a $30K M16, which would nearly double your money. My Mac at $2.5K has nearly doubled. My friend got his $6.5K uzi a few years back... has almost doubled. On the other hand large MGs like M2HBs are way down. So like anything you must be careful. However a M16 is kind of base for the whole market.

rob-cubed said:

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.

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Certainly I think some MGs are high now. Colt M16s are overpriced. RR Conversions were at $12K when the Colts M16s were at $16K. Now the Conversions are at $16K and the Colts are at $30... na a bit of a bubble there. Like anything, you must buy smart...

SWO Daddy said:

Good luck with anything other than an unsecured loan.

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What is secured? You mean backed by a Government that owes how much in debt?

rem87062597 said:

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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Sure but its more than just an investment. I would never borrow just to invest without a clear quick profit. That said, its likely one can borrow money, buy a MG, enjoy it for years and still sell it above the cost of the loan. Thats given the last 30 years of NFA history on most MGs.

IMBLITZVT said:

If you took out 16K three years ago, you would be looking at a $30K M16, which would nearly double your money. My Mac at $2.5K has nearly doubled. My friend got his $6.5K uzi a few years back... has almost doubled. On the other hand large MGs like M2HBs are way down. So like anything you must be careful. However a M16 is kind of base for the whole market.

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If you took out a 16k loan 3 years ago for a M16 purchase you should really have used your crystal ball to stop Sandy Hook rather than purchasing guns in preparation for the panic following it.

IMBLITZVT said:

Sure but its more than just an investment. I would never borrow just to invest without a clear quick profit. That said, its likely one can borrow money, buy a MG, enjoy it for years and still sell it above the cost of the loan. Thats given the last 30 years of NFA history on most MGs.

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It's only an investment if you plan to actually sell it though, otherwise it's just an asset. I think 99% of people that claim that their guns are investments are just people trying to justify another gun purchase.

Long1MD said:

The biggest issue I have had with investing in full auto is a place to shoot. Not many ranges will let you go rapid fire semi auto much less full auto. I've even known people to go full auto on 20+ acres of their own property just to have the police show up because of neighbor complaints. As far as an investment, there aren't many folks that make a lot of money on full auto items unless they have sat on the guns for 15-20 years. As the Pawn Stars say " that might have been the asking price, but what did it really sell for?"

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There are plenty of places to shoot. Just have to look. Here in central MD, there are more than a handful and its about as bad here as anywhere. Just have to buy wisely if this could be an issue. A Sub gun is a lot easier to shoot than and M2Hb. Police can't stop your shooting if legal just because of FA. So what if they show? Does not stop us. That is not true, there are a lot of people who have made serious money on MGs in short time spans. Of course not everyone but if it was that easy, everyone would do it. Right now I expect I could turn anywhere from 25-50% on every MG I have bought so far. I bought smart, yes but I have only had them for 5 years or less. MGs will sell. There are dealer out there what will overnight funds to you for 10-15% under market value on a lot of MGs: http://dealernfa.com/wanted/ Find a pawn store willing to pay more than 2/3rd of what it is worth. I see MGs 5% under market value consistently sell in 24 hours of posting. The money is out there and it is not hard to sell a MG priced well.

Name Taken said:

That's my point.

If your investor told you to take a second mortgage on your house to buy Ford stock at 2.09 like it was in 2008 promising you it would go to 24 like it did a few years ago would you fire him?

If you have the money laying around and want to "gamble" it's no different then the stock market or investing in a start up company. But to spend money you do not have to try and make it big in the NFA world or by convincing yourself a toy is an investment then you really need to reevaluate your money.

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I would agree here. If you think you are going to retire off a NFA investment you took a loan on, thats not going to happen most likely. However I would say its near stock market level of investment. That said the OP did not state this like its a retirement investment strategy. Looks like he wants into the NFA and the investment is a side benefit and he wants to make sure he does not lose his ass on it. I would also argue that any money is a gamble these days. Stock market sure is, Gold is up and down quickly. Doing nothing is just losing value and quickly.

Name Taken said:

If you are buying it for an investment and do not have the cash to replace it then you shouldn't be shooting it.

What happens if you have a catastrophic failure and your 16k dollar is a pile of parts?

If you don't have the money to replace it it should be sitting in the safe. I'm not sure how insurance would work on a 16k dollar machine gun.

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Catastrophic failure... you fix it! Its happened and has been fixed. Might not be cheap BUT it will be fixed! Will be fixed, no doubt, none! I would buy one blown up for the right price. You are paying a large portion of money for the paperwork.

rem87062597 said:

I completely agree, and if you're just buying it and throwing it in a safe for an investment you're further reducing supply in a market dictated by low supply and high demand while not even enjoying the benefits of the gun. It's bad for the rest of us who would actually enjoy it.

Just buy some index funds.

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You guys are getting away from the original post from what I can see. I did not see this laid out as an investment strategy to make him rich. Looked to me like he wants a way to fund a MG that will not leave him broke and will hopefully make him a little money in the end.... I could be wrong I guess?

My big concern (ok, maybe not THAT big), is that people will find away to obtain legal MGs (maybe through the trust route that's being pursued, or others), which would kill the value of pre-86 MGs.

Wow, hell if I'd borrow money to purchase a toy. I am extremely debt adverse. I'm am completely debt free and hell if I'm going into debt to buy toys. If I can't pay cash for something, that's the universe's way of telling me I can't afford it.

rob-cubed said:

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.

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True. If the prices keep rising, who the hell is going to be able to afford MGs? Warren Buffet? I think we're in a huge MG bubble.

rem87062597 said:

If you took out a 16k loan 3 years ago for a M16 purchase you should really have used your crystal ball to stop Sandy Hook rather than purchasing guns in preparation for the panic following it.

It's only an investment if you plan to actually sell it though, otherwise it's just an asset. I think 99% of people that claim that their guns are investments are just people trying to justify another gun purchase.

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Not trying to be rude but I can see you don't understand the MG market. MG market did not react to Sandy Hook. If anything it just did nothing. People were buying up semi autos about to be banned. MGs prices right now are driven by ammo prices and supply. Guns running 30-06-308-50BMG are down in value. Guns running 9mm and 223 are way up.

Certainly on the last part. However sometimes assets get sold... then it does get looked at as an investment. I have very few things I know I will never sell. I have other things I had not thought I would have sold that are long gone... So it does make sense to look at something priced that high as a possible investment before jumping in.

Alphabrew said:

True. If the prices keep rising, who the hell is going to be able to afford MGs? Warren Buffet? I think we're in a huge MG bubble.

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Simple supply and demand isn't a bubble. Nothing is being overvalued, supply is just low and demand is high. If prices were doing this and supply was variable I'd say we're in a bubble, but as it is we're just following this chart.

aaronn said:

My big concern (ok, maybe not THAT big), is that people will find away to obtain legal MGs (maybe through the trust route that's being pursued, or others), which would kill the value of pre-86 MGs.

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A small concern I would say. ATF and the Government are not going to let that happen. Its a nice legal issue but I serious doubt its going anywhere. More likely SCOTUS would over turn the ban.... and none of us are holding our breath there.

Alphabrew said:

Wow, hell if I'd borrow money to purchase a toy. I am extremely debt adverse. I'm am completely debt free and hell if I'm going into debt to buy toys. If I can't pay cash for something, that's the universe's way of telling me I can't afford it.

True. If the prices keep rising, who the hell is going to be able to afford MGs? Warren Buffet? I think we're in a huge MG bubble.

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Good point but you don't know where he is at in life. I wish I would have borrowed money to buy my M16. I would have a $32K gun for $16K instead of a $14.4K gun that I saved up for that would have been $12K at the time I decided to do it. I got priced out of the gun I wanted to get while saving up for it. The loan would have made a lot of sense. Will it work the same here... probably not as they are already way up in value. However if he is one of those not able to save money, its not the worst way to go.

Debt free? Have kids? I would bet not. I would love to live debt free and work towards that... maybe in 25 more years... unless someone wants to give us lots of money!

People have been taking of MG prices topping out for years. Has not happened yet. Now people just buy fewer MGs at higher prices. People afford what they want...

IMBLITZVT said:

A small concern I would say. ATF and the Government are not going to let that happen. Its a nice legal issue but I serious doubt its going anywhere. More likely SCOTUS would over turn the ban.... and none of us are holding our breath there.



Good point but you don't know where he is at in life. I wish I would have borrowed money to buy my M16. I would have a $32K gun for $16K instead of a $14.4K gun that I saved up for that would have been $12K at the time I decided to do it. I got priced out of the gun I wanted to get while saving up for it. The loan would have made a lot of sense. Will it work the same here... probably not as they are already way up in value. However if he is one of those not able to save money, its not the worst way to go.

Debt free? Have kids? I would bet not. I would love to live debt free and work towards that... maybe in 25 more years... unless someone wants to give us lots of money!

People have been taking of MG prices topping out for years. Has not happened yet. Now people just buy fewer MGs at higher prices. People afford what they want...

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You got me!!

Alphabrew said:

Wow, hell if I'd borrow money to purchase a toy. I am extremely debt adverse. I'm am completely debt free and hell if I'm going into debt to buy toys. If I can't pay cash for something, that's the universe's way of telling me I can't afford it.

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rem87062597 said:

Simple supply and demand isn't a bubble. Nothing is being overvalued, supply is just low and demand is high. If prices were doing this and supply was variable I'd say we're in a bubble, but as it is we're just following this chart.

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Do you recall the housing bubble? Supply = demand then, too. Same can be said for stocks and tulip bulbs, but there have been bubbles and crashes for both.

The big difference is that new houses get built everyday but the number of legal machine guns decreases while number of potential buyers increases.

If the government made building new houses illegal, the price would explode.

Same with cars in Cuba.

ericoak said:

The big difference is that new houses get built everyday but the number of legal machine guns decreases while number of potential buyers increases.

If the government made building new houses illegal, the price would explode.

Same with cars in Cuba.

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Prices are in the stupid territory for MGs IMHO. I have no kids and no debt and love of MGs, so if a dude like me thinks MGs are too expensive, they are def going to come down in the future. Bank on it. I don't know when, but it's going to happen. Definitely don't go leveraging any MG purchases with debt. Terrible idea.

Also, I would not say that potential buyers is increasing. If anything, it's the rich baby boomers who are paying stupid money for MGs now. When they die off there will be fewer buyers chasing the same number of MGs.

Alphabrew said:

Prices are in the stupid territory for MGs IMHO. I have no kids and no debt and love of MGs, so if a dude like me thinks MGs are too expensive, they are def going to come down in the future. Bank on it. I don't know when, but it's going to happen. Definitely don't go leveraging any MG purchases with debt. Terrible idea.

Also, I would not say that potential buyers is increasing. If anything, it's the rich baby boomers who are paying stupid money for MGs now. When they die off there will be fewer buyers chasing the same number of MGs.

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No offense, but it sounds like you have no idea what you are talking about it. The fact that you personally wouldn't pay for something has no bearing on what the market is.

NFA sales across the board have exploded in the past 5 years, and a good portion of that is people finding out SBRs, Suppressors, and MGs are not only not illegal, but actually quite easy to get.

I personally know 4 people who said they wouldn't never buy a MG, but not a year after getting their first tax stamp were looking to purchase Macs.

Alphabrew said:

You got me!!

Do you recall the housing bubble? Supply = demand then, too. Same can be said for stocks and tulip bulbs, but there have been bubbles and crashes for both.

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Haha... Yeah Kids do change things.
Actually in the housing bubble, 30% of the houses where being bought by people who were not going to live in them. Speculation was that high as the money was near free. Thats why when the bubble burst the prices fell off for so long as that 30% slowly got put back towards the supply.

ericoak said:

The big difference is that new houses get built everyday but the number of legal machine guns decreases while number of potential buyers increases.

If the government made building new houses illegal, the price would explode.

Same with cars in Cuba.

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Yes. Now if the US lifts its trade embargo... those cars are going to be worth a lot less unless they get sold to the US as collector items!

Alphabrew said:

Prices are in the stupid territory for MGs IMHO. I have no kids and no debt and love of MGs, so if a dude like me thinks MGs are too expensive, they are def going to come down in the future. Bank on it. I don't know when, but it's going to happen. Definitely don't go leveraging any MG purchases with debt. Terrible idea.

Also, I would not say that potential buyers is increasing. If anything, it's the rich baby boomers who are paying stupid money for MGs now. When they die off there will be fewer buyers chasing the same number of MGs.

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Stupid money? Well that all depends on if you value the money or gun more and how much more. Would you buy a Mac for $1K thats worth $4K today? Well $1K is still stupid money for a gun that should sell at $400 or less if the Government was out of the gun regulation business. I am guessing you are also a younger guy. As you get older, larger sums of money are not as a large as they once where. Short of a change in the Government, the prices will continue to go up. You can bank it. All Countries eventually collapse. So yeah at that point the ATF and NFA will go ahead and the prices will not be subject to them. However at the point it happens, the MG will be worth more than the money... Also remember we have non-backed Money not worth the paper its printed on. It too will be worth nothing at some point... bank that too!

The range of people buying MGs is more than just those above 50. Actually I see more guys in their 30s and mainly their 40s right now buying MGs. People in the baby boom generation tend to already have the MGs they want in my experience. The population of the US is still growing. The supply of MGs is slowly declining. Unless people stop liking guns, MGs are not going anywhere from because of lack of demand. Its worse than claiming housing prices will go down as the baby boomers die and no one around to live in the houses... Sorry man, waiting for those cheap MGs is not likely going to happen short of real political change! Fair chance that political change will be bad enough that the MGs will be worth their weight in Gold...