I'm really not sure what to think of this item. In its current state I don't really like it too much.
This is basically an item that becomes useless with the replacement of mechanical skill, which means it may be too good in lower ranks (In which good mechanical skill dominates) and completely unnecessary in higher ranks (In which good mechanical skill is pretty much required).
You should give the item at least an effect that would make it good no matter the rank, therefore I suggest making the bullets bouncy instead - give them the ability to home into enemies after bouncing off of surfaces (as long as the targets are in close proximity) which also gives them the possibility to catch enemies behind corners.
You could also give the bullets piercing and multiple bounces (like 2 max), making gun heroes very powerful in closed spaces and giving the item some actual purpose in higher ranks.
As for the upgrades, I guess Titanic Magazine and High-Velocity Rounds is a fine upgrade for this item.
Other than everything listed, the only other issue I have is that this item may conflict a bit with Ricochet (specifically with the changes I suggested) and may also make a combination of these two items overly powerful