Experiences starting a home-based FFL

[Gutter]

Low volume will bring additional scrutiny from the ATF. The DOJ, not so much. Just be prepared to answer their questions.

Good to know. I don't have any issues with transparency and I don't intend to come close to skirting the spirit of anything so I think that's something I can handle. Back to the used firearms issue; was the issue specifically with consignment or did it include second-hand items as well? I know there is a level of reporting to the Sheriff for all second-hand items and a yearly fee. When I did check out the licensing application, consignment and second-hand were different items which brought up the question of whether the issue was just with one of them or both. Regardless, it warrants a call to their office.

Was it worth it? I'm having a ball. I get to help people find stuff they want and since I'm referral only I can say with all honestly I have not had a single "bad" customer. I'm making a little money and I have access to wholesale suppliers. I've been able to buy firearms at gun shows that are not C&R, or from people who are not willing to sell to a C&R license. I have been able to buy stuff I think I can flip for a profit and I have added a couple guns to my collection that way.

Thanks for the input Nardo (and Burbur from earlier). I've been doing a lot of research on taxes related to LLCs and it seems like it shouldn't be too much trouble with some decent bookkeeping and being aware of the yearly fee and self-employment tax. Pass-through taxation seems ideal for my situation. Haven't looked at insurance quite yet, but what's the yearly overhead on that been like?

[rbetts]

Consignment is considered Pawning and as such is not coded for a residential neighborhood.

[upsdude]

if you can do home based go for it-i had to pay rent on a space for over 6 months Without being able to use it since to get all the licenses/permits. amd for sure working from hime cuts down on cost.




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[weaselfire]

You may run into trouble with the ATF as they frown on 01FFL "hobbyists". The business needs to be a viable concern. They will ask you about this and then about the number of guns you intend to sell each year. . . .

That's actually easy to get past -- prepare a valid business plan. Gets over the whole business/hobby thing in minutes.

Been there, done that.

Jeff

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[Gutter]

Almost feel embarrassed to ask, but has anyone ever worried about security and the possibility of randoms coming to your home? Did some searching and I couldn't find any threads on negative experiences related to that and all my interactions with other gun folk over the years have been positive so I figure it is low risk. I guess I would just be more concerned about someone finding out that firearms are kept at the residence and becoming a target. Granted, I suppose there is that risk regardless of licensing or not.

Secondly, regarding audits and the hassle there, it sounds like ATF audits aren't terrible as long as you're not a jerk and have everything in order, but how is CA DOJ? Are they reasonable or are they the boogeyman that every other thread makes them out to be?

[Never Convicted]

following

[CAL.BAR]

I see this being a money pit and a losing situation and unless you have some connection where you know you'll be consistently able to purchase or take on consignment decent sized and desirable collections.

Many other more established places already do this. Also not everybody wants to consign guns you'll need the capital to be able to purchase collections.

Exactly. And the ATF will take away your FFL license if they see you're not using it.

[CAL.BAR]

Almost feel embarrassed to ask, but has anyone ever worried about security and the possibility of randoms coming to your home? Did some searching and I couldn't find any threads on negative experiences related to that and all my interactions with other gun folk over the years have been positive so I figure it is low risk. I guess I would just be more concerned about someone finding out that firearms are kept at the residence and becoming a target. Granted, I suppose there is that risk regardless of licensing or not.

Secondly, regarding audits and the hassle there, it sounds like ATF audits aren't terrible as long as you're not a jerk and have everything in order, but how is CA DOJ? Are they reasonable or are they the boogeyman that every other thread makes them out to be?

Every FFL I work with says the same thing. Either the CA DOJ or the ATF CAMPS OUT at there shop for days or a week at a time with fine tooth combs. Probably not as big a deal if you are only doing a few deals a week/month. But a REALL hassle for full time heavy volume FFL's

[Nardo1895]

In my two years of operating I've had one DOJ inspection and none from ATF. My ATF rep did interview me before recommending approval of my FFL. I had to convince her this wasn't a hobby. I did have a business plan but she seemed convinced without it so I didn't give her a copy. As I said in a previous post -- very friendly, helpful, and encouraging.

The DOJ rep was also very nice but very thorough. I think I had about 20 or 30 transfers that first year and she was there about 90 minutes. I'm not sure if she looked at every one or pulled them at random. I had a couple issues I had to resolve; I didn't file the signed copy of a FSC I had issued and I failed to have a number of buyers initial the middle of the Safe Affidavit. (I didn't even know the initial box was there -- its in a grayed out section and hard to see.) She issued me a corrective notice and had me fix the issues. She asked to see a couple of firearms I had in inventory, took a picture of my gun safe, and that was about it. Pretty painless.