I think there are lots of SOT's dropping their license. I see lots of post samples sell on GB all without the law letter requirement so they are quitting. The good news is what I paid for my posties years ago is much less than what they are bringing now.

I need to keep an eye out for these cheaper pre-samples.

Its not just pre-samples.
Transferable MG prices are down. If I wasn't buying a house right now I would be buying more MGs.

Title 1 firearms are dirt cheap as well, some of the parts kits companies are selling are insane, $250 for a M4 style carbine with everything minus the stripped lower?!
And don't get me started on ammo! I just bought Wolf steel case 223 for $0.17 a round and have been eyeing some 9mm for 0.13 a round.
Not to get political but I imagine we will see a small bump in prices next year pre-election and depending on who gets elected we will either see the firearm industry bounce back or continue the downwards slide for another 4 years.

You are right. I’ve seen some great deals lately. A well known dealer sold an S&W 76 that needed a refinish for $9500. I’ve also seen a WH Thompson go for $15,000 and a STEN go for around $5800. There are also two RR conversions sitting on subguns for $17000. Uzi prices have also gone down significantly.

Yep.  Prices are down.  Moved an MP5 for ok money and have one other pre May gun.  I'm not selling anything else and I'm dropping the SOT.

Prices always fluctuate.  We are an election away from another skyrocket in pricing.  The economy is also correcting itself too, so there's that.  Great time to buy really.

Mike

Ok what’s the difference between a pre may, post May, no law letter, must have law letter, pre sample etc...

I know what a keeper is and that’s about it when it comes to the non standard MG ads. Lol

Pre-May or Pre-Sample  = Machinegun imported into the Country between the passage of the Gun Control Act (1968) and FOPA (1986).  These are guns that can only be transferred to current FFL/SOT holders being post GCA 68 imports but are not post May of 86 guns.  The big advantage of these guns is that they do not require any law enforcement demo letter and they can be kept after the FFL/SOT lapses.   Think of them like "transferables" for FFL holders.

Post-May = Any machinegun imported or manufactured after 1986.    Only FFL/SOTs can purchase these and in most cases require an Law Enforcement "Demonstration Letter" aka "Demo Letter", "Love Letter", "Law Letter"  to purchase.  In a nutshell if a FFL/SOT is going to buy one of these they need an Law Enforcement Agency to essentially sponsor them for purchase under the auspices of providing the department a "demonstration" of the gun in pursuit of a potential sale.

There is one exception to transferring Post-May guns without the required law letter.    If the current FFL/SOT owner is going out of business and is giving up his license, than he can sell the Post May machineguns in his inventory to certain other classes of FFL/SOTs without the required law enforcement demonstration letter.

The big exemption to this "exception" is that 01/03s (aka dealers) don't qualify and would still need a law letter.  Only manufacturers 07/02, 10/02 and importers 08/01 and 11/01 are eligible.

The result on the pricing hierarchy is that Pre-Mays command the biggest premium at roughly 25% to 50% of transferable pricing.

Post May guns that require a law letter for everyone run roughly the cost of their semi-auto peers or maybe even less in some cases.

Post May guns that don't require a law letter for mfgs and importers are 3x to 5x their "no law letter" peers cost.

There are obvious exceptions for rare and valuable guns like an MP7 where even law letter samples run upwards of $10K.

Thank you for answering that. Need to print off your post so I won’t forget about it.

Edit with a question:

What’s keeping a manufacturing SOT from converting normal AR lowers to MG lowers and selling them to other SOTs? Does the buyer also have to be a MFG or can it be a normal dealer with a SOT? And is there a law letter involved?

As quoted above, the manufacturer could sell a converted AR-15 receiver to the SOT dealer, but the dealer would need a demonstration letter from an Agency. The determination letter is not so easy to get. Most any Agency can deal directly with Colt or Rock River Arms or a factory distributor. To be clear, the purpose of a SOT is to be in the business to make money. It is actually a felony to use the SOT to improve their personal collection. So how many SOT holders would risk tens of thousands of dollars on defending themselves in Federal court over a couple hundred dollar converted AR lower? There is also an issue for the Chief Law Enforcement officer that would sign the letter. Why would an Agency, with budget restraints risk the liability of a converted AR-15 lower than buying a factory converted lower unless the CLE officer was doing the dealer a favor. That has it's own "entanglements", that could cause big problems for the Chief. Again all the possibilities of huge problems for a couple hundred dollar converted AR lower.  Does bogus demonstration letters happen? I am sure that they do. But with the huge consequences involved to most that would not make sense.

Scott

You're not even an FFL or SOT and have never worked with any PD or Sheriff on a letter so you should probably keep your responses to topics in which you have some experience. Demo letters in many areas of the country are not hard to get and neither is an FFL/SOT and really the only roadblock to an FFL is zoning for people who live in big cities.

I guess it all depends on your definition of "not hard to get"
If I show up in the front office of my LEO with zero connections to anyone who works there and ask for a demo letter will they produce one? Highly unlikely.

My uncle was a police captain when he retired and I asked him about this exact scenario and he said his department does not issue demo letter. They also don't deal with random people who run FFL/SOT services out of their basement or garage. They have a long standing relationship with a local shooting range that catered to their firearm needs.

But this is in a fairly large city with sample size of one department. This could be a completely different story in small town America where there are few if no local FFL/SOTs, everyone knows the police staff personally, everyone has a very pro-gun political view, etc...

Also just because someone doesn't have an active FFL/SOT doesn't mean they haven't done a ton of research on the subject. I have also run into plenty of FFL/SOTs who have NO CLUE what they are talking about. The last time I transferred a suppressor the dealer was so confused he couldn't figure out the paper work after 5 tries, but since I was a "nobody" and he was the "Expert" he refused to listen to me. I had to call the ATF and they walked him through the process. Got one hell of a evil glare the next time I came in haha

To me pricing between no-letter pre-Mays available to all SOTs, no law letter post May guns for 02 & 01s, and demo letter required guns is reflective of the overall difficulty of SOTs to get an LE demonstration letter.

I don't doubt that some folks are able to get demo letters for any gun they want without much trouble but in my experience most FFL/SOTs I have dealt with over the years who have gotten demo letters it was a sizable investment of time and resources to develop the relationship necessary to get to the point where they could get a letter and perform a demo.

The comments I hear now-a-days is that most agencies really want to limit letters to guns they have a genuine interest in purchasing. The days of getting a letter (as a favor or in trade for other gear) for an oddball dealer personal interest gun which has no real demonstrable modern LE purpose are much more rare/difficult.

dealers are going out of business left and right here in Phoenix and I would guess a fair amount of them had SOTs.

Also, my local FFL/SOT said that ATF is now calling the LEO to verify that the letter is legit before they approve the form for the dealer. That will slim down the number of demo letter guns in the future.

I do think the Pre may market is just ripe for picking.  I'm seeing a lot of stuff out there now, and some folks are getting antsy.

That has been going on for a good while.

I hope it doesnt infect the transferable market.
I think people are jittery about Trump being replaced.

This has been common. There has been abuse of the law letter system by SOT's in the past and I think an SOT in Pa. went to jail over it.

You are probably referencing the now infamous Vaughn Kelerchian of ASI aka Autoweapons.com.

He was also convicted of conspiring with a local PD to get import and get a hold of LE only products like HK416s and IR lasers.  They then resold the lasers and HK416s as parts kits.

The conviction notes can be found below.   I was surprised he got 8 years but I don't suspect his bright and shiny personality helped him in this situation either.

https://www.justice.gov/usao-ndin/pr/pennsylvania-firearms-dealer-sentenced-100-months-imprisonment

However there was another FFL/SOT quite some time back that got busted for fake demo letters and which initiated a more stringent review of letters going forward.

This happened near where I used to live. The kid was a real douche bag.
https://www.oregonlive.com/pacific-northwest-news/2016/11/feds_move_to_seize_machine_gun.html

He may be, but he had a real LE demo letter, and ATF approved the transfer (although the letter was over a year old).
They seized his G18 months later, leaving him $3,475 poorer.

This appears to be where he messed up the most:
Sounds like he took the time to explain everything.

He didn't do anything illegal.
ATF violated their own policy, and punished him for it.

Regarding demo law letters, an SOT that I’ve done business with always said the best way to get them was to approach the local PD about selling weapons to their SWAT team and then offer them a free range day for them and their officers with a bunch of different weapons to try out with free ammo.

He said many PDs would take him up on it and send demo letters for the guns they wanted to be at the range day (if he didn’t have them already).

It seems like an expensive day for the SOT, but a legitimate way to get a law letter for several different MGs.  He also said he usually ended up making some sales from the range days as well.

This was several years ago, so with the prevalence of ARs and M16s, this tactic might not be as successful, but I can’t see many PDs turning down a free range day to try out a bunch of different MGs.

saw a pre may Uzi sold on GB for $6k...  that seems way down.  all these no letter guns floating around does make it seem like a good time to get into the business...   but as mentioned before, its really more of a pain then people think.  I have a buddy that gets energized about it every 12 to 18 months, I go through all the requirements and he forgets about it for a while.

If you had land with no zoning concerns and a separate outbuilding, then I think it becomes a lot more manageable.  But who wants their home to be a publicly known FFL & gun business while you have kids and family living there.

Exactly. Unless you're REALLY into MGs and are looking for a hobby to consume every waking second of your free time its much easier (and often cheaper) to just buy a couple transferable and call it a day. This recent dip in price is a great opportunity to snag a subgun at prices from several years ago.

Agreed on all points. I’ve been there and the business side really isn’t worth all the effort and hoops (at least for a home based). I’m with Spartikis, just buy transferable and you will enjoy it.

I'm thoroughly enjoying buying/owning post-samples. Thank you very much.
Hopefully soon I can afford some of these lower pre-sample prices.

@rssc
@bigbore
@spartikis

Where are y’all seeing transferable sell at down prices?  Seems like all the same stuff at reserves on gunbroker and sturm nothing jumps out at me.  Would like to add a M16 or Uzi.  Maybe a Mac if it’s just plain cheap.

I see stuff on all the major websites posted and reposted. I think there is a kind of stalemate going on between buyers and sellers right now. It also doesn’t help that such a big percentage of the transferable market is sold by a small number of dealers so they can keep up a unified front and not drop prices (thereby keeping the market price high). The stuff that is selling is priced lower than what was a good price a year ago...

Recent sales

West Hurley Thompson

Another Thompson

Sten

Sp1 conversion that likely sold at less than $16,900

Vector Uzi sitting at 12k and it appears the seller would take less (this gun would have sold quickly a year ago at this price)

I don’t have a link but an mk760 sold on subguns for $5899 or so.

2 MAC's just recently sold for under $6k:

M10-45

M10-9

and 1 just over $6k:

M10-45 with extras

I often think of this. I am home based, and I know that folks can find my address online.  Hence, everyone here in the house is trained on weapons.  I still have my SOT and some MGs.  I have security in place, German Shepherd, and most of all, I am armed at all times with an AR and s a subgun close at hand.  Nevertheless, I often think of the risks.

I'm always buying transferables.

Tonight I was shopping, and I noticed that people are buying transferables again. For the last 18 months, there wasn't much buying action. Usually I was the only buyer and could negotiate knowing I had no other competitive buyer on the offer. That seems to have changed in the last month or so.

Like usual, Ruben's prices are climbing. Again.  Now he's asking nearly $43,000 for an MP5 with a sear. Holy moly.

Happened with a "famous" MG importer of AKs and related years ago... Who knew that when you import .50 Dskhs with law letters from  3 man sheriff departments, someone will eventually call BS.

A Vector full size UZI was just posted on UZI Talk for $11,000.