Sometimes foreclosure is a family affair.
The Ostad brothers, a trio of New York real estate investors, have been named as defendants in nine foreclosure suits related to loans totaling more than $70 million. Edward and Michael Ostad are named in all the cases, while Steven Ostad is named in three of them.
The lender is trying to recover some money out of the Ostads personally, pointing to guaranty agreements they signed. The brothers stopped making payments on the loans in April, according to the plaintiff.
That’s the same month that Michael and Edward sued Steven, hoping to dissolve their family partnerships.
The two older Ostad brothers lead fix-and-flip lender Flatiron Realty Capital, which does not appear to be involved in the properties or foreclosure cases. The pair describe themselves as “successful urologists,” in addition to investors.
In court filings earlier this year, the two painted Steven as the black sheep of the family. They claimed the youngest Ostad “has never had a job” and “has a lifelong history of serious personal issues and self-destructive behaviors.” Michael and Edward accused Steven of standing in the way of their effort to dissolve the partnerships. The youngest brother had racked up millions in judgements and debts, they alleged.
Steven is the founder of residential brokerage Empire City Realty and lender Real Quick Capital, although both appear to be closed. The case is still pending.
Steven’s attorney said the youngest Ostad is a passive investor in the properties named in the recent foreclosure suits and was “shocked” to learn payments weren’t made.
“We find it more than coincidental that debt service payments allegedly stopped in April of 2025 – just as Steven’s brothers sued him on April 14, 2025,” Christopher Milito of Morrison Cohen said via email.
Michael and Edward did not immediately respond to requests to comment.
Steven’s investments were located in the Highbridge and Woodstock neighborhoods of the Bronx, as well as in Manhattan’s Hamilton Heights. The properties controlled by Michael and Edward without Steven were located in Sunset Park, Brooklyn, East Harlem, Hamilton Heights and the Fordham neighborhood of the Bronx.
The plaintiff took over the loans after the collapse of the original lender, Signature Bank. It’s now trying to recoup at least some of the investment from the Ostad brothers personally. In letters to the brothers included in court documents, the lender accuses the investors of breaching guaranty agreements they signed by not turning over rental income after the default. That entitles the lender to collect those funds from the brothers personally, it argued.
Milito, an attorney for Steven, noted the complaint does allege misappropriation of rent but makes no specific allegations of misconduct against Steven specifically.
“It could not, as Steven’s brothers were in exclusive control of the properties’ finances,” he wrote.
Read more
Commercial
New York
Ostads v. Ostad: Rent-stabilized distress frays family ties
Residential
New York
Investor lists landmarked Village townhouse for $11M — the same price he paid for it in 2021