8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act

Date of Report (Date of earliest event reported): August 14, 2007

INCOME OPPORTUNITY REALTY INVESTORS, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada	001-14784	75-2615944
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

1755 Wittington Place, Suite 300
Dallas, Texas	75234
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 214-750-5800

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information

Item 2.02. Results of Operations and Financial Condition

     On August 14, 2007, Income Opportunity Realty Investors, Inc. (“IOT” or the “Company”) announced its operational results for the quarter ended June 30, 2007. A copy of the announcement is attached as Exhibit “99.1.”

     The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly-update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

     (c) Exhibits.

     The following exhibit is furnished with this Report:

Exhibit
Designation	Description of Exhibit
99.1*	Press Release dated August 14, 2007.

* Furnished herewith.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly-caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly-authorized.

Dated: August 15, 2007	INCOME OPPORTUNITY REALTY INVESTORS, INC.
	By:	/s/ Steven A. Abney
		Steven A. Abney, Executive Vice President
		and Chief Financial Officer

EX-99.1

Exhibit 99.1

NEWS RELEASE	Contact:
	Income Opportunity Realty Investors, Inc.
FOR IMMEDIATE RELEASE	Investors Relations
	(800) 400-6407
	investor.relations@incomeopp-realty.com

Income Opportunity Realty Investors, Inc. Reports Second Quarter 2007 Results

DALLAS (August 14, 2007) — Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported a net loss of ($951,000) or ($0.23) per share for the three months ended June 30, 2007, compared to net income of $65,000 or $0.02 per share for the same period in 2006. For the six months ended June 30, 2007, IOT reported a net loss of ($885,000) or ($0.21) per share compared to net income of $659,000 or $0.16 per share for the same period in 2006.

Key items for the three and six months ended June 30, 2007, compared to the same periods in 2006 included:

• Rental income for the three and six months ended June 30, 2007 was $2.2 million and $4.2 million compared to $1.9 million and $3.6 million, respectively, in the corresponding periods in 2006. Approximately $250,000 of the increase for the six months ended June 30, 2007 is due to the March 2006 acquisition of the Falcon Point Apartments located in Indianapolis, Indiana. The remaining increase of $350,000 for the six month period is due to increased average rents at IOT’s other residential properties, all of which are located in Midland, Texas.

• Property operating expense for the three and six months ended June 30, 2007 was $1.1 million and $2.2 million, respectively, compared to $1.0 million and $1.8 million for the corresponding periods in 2006. The increase for the six months ended June 30, 2007 is primarily due to operating expenses from the Falcon Point Apartments.

• Depreciation expense for the three and six months ended June 30, 2007 was $198,000 and $396,000, respectively, compared to $190,000 and $360,000 for the corresponding periods in 2006. The increase is due to additional depreciation from Falcon Point Apartments.

• General and administrative expenses for the three and six months ended June 30, 2007 was $140,000 and$283,000, respectively, compared to $132,000 and $282,000 for the corresponding periods in 2006.

• Advisory fees to affiliate for the three and six months ended June 30, 2007 was $367,000 and $578,000, respectively, compared to $243,000 and $417,000 for the corresponding periods in 2006. The increase was due to a net increase in gross assets, which is the basis for the advisory fee and increased the advisory fee by $18,000 and $45,000 for the three and six months ended June 30, 2007. In addition, the Company pays a 1% fee to its advisory company for new and refinanced mortgages. The fee for refinancing was $127,000 greater in the three months ended June 30, 2007 than the prior year.

• Interest income for the three and six months ended June 30, 2007 was $1.1 million and $2.2 million, respectively, compared to $844,000 and $2.0 million for the corresponding periods in 2006. IOT earns interest on funds invested with or advanced to its advisory company, Syntek West, Inc.

• Interest expense and related fees for the three and six months ended June 30, 2007 was $2.4 million and $3.8 million, respectively, compared to $1.1 million and $2.0 million for the corresponding periods in 2006. The increase was primarily due to the additional debt incurred by IORI during 2006 and 2007 due to new loans, refinancings and the acquisition of Falcon Point Apartments. During 2006 and the first half of 2007 mortgage debt increased by approximately $16.6 million.

• The increase in interest expense and related fees between the first and second quarter of 2007 was due principally to a prepayment penalty and defeasance costs of approximately $900,000 related to mortgages that were refinanced in June 2007.

• The net income fee to affiliates for the three and six months ended June 30, 2007 was $5,000 and $0, respectively, compared to ($5,000) and ($55,000) for the corresponding periods in 2006. The net income fee is based on 7.5% of IORI’s net income.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and land held for development. For more information, go to IOT’s website at www.incomeopprealty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

	June 30,			December 31,
	2007			2006
	(unaudited)
Assets
Real estate held for investment	$	63,456		$	63,682
Less—accumulated depreciation		(5,457	)		(5,061	)
		57,999			58,621
Notes and interest receivable — related parties		28,625			27,777
Investment in real estate partnerships		500			515
Cash and cash equivalents		37			80
Receivables from affiliates		24,970			17,766
Other assets		3,149			4,152
	$	115,280		$	108,911
Liabilities and Stockholders’ Equity
Liabilities:
Notes and interest payable	$	69,371		$	61,546
Other liabilities		1,329			1,921
		70,700			63,467
Commitments and contingencies
Minority interest		649			605
Stockholders’ equity:
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 4,165,015 and 4,168,035 shares at June 30, 2007 and at December 31, 2006, respectively		42			42
Additional paid-in capital		61,932			61,955
Accumulated deficit		(18,013	)		(17,158	)
		43,931			44,839
	$	115,280		$	108,911

	For the Three Months						For the Six Months
	Ended June 30						Ended June 30,
	2007			2006			2007			2006
	(unaudited)						(unaudited)
Property revenue
Rents and other property revenues	$	2,160		$	1,923		$	4,249		$	3,620
Operating expenses
Property operations		1,096			1,032			2,203			1,836
Depreciation		198			190			396			360
General and administrative		140			132			283			282
Advisory fees — related party		367			243			578			417
Total operating expenses		1,801			1,597			3,460			2,895
Operating income		359			326			789			725
Other income (expense):
Interest income (includes $614 and $1,179 in 2007 and $182 and $342 in 2006 from related parties)		1,136			844			2,235			1,998
Mortgage and loan interest expense and fees		(2,430	)		(1,152	)		(3,850	)		(2,048	)
Net income fee — related party		5			(5	)		—			(55	)
Total other income (expense)		(1,289	)		(313	)		(1,615	)		(105	)
Income (loss) before equity in earnings of investees and minority interest		(930	)		13			(826	)		620
Equity in earnings (loss) of investees		(15	)		81			(15	)		81
Minority interest		(6	)		(29	)		(44	)		(42	)
Net income (loss)	$	(951	)	$	65		$	(885	)	$	659
Earnings (loss) per share
Net earnings from continuing operations	$	(0.23	)	$	0.02		$	(0.21	)	$	0.16
Weighted average common shares used in computing earnings per share		4,166,525			4,168,035			4,166,525			4,168,035

INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Six Months Ended June 30, 2007
(amounts in thousands)
(Unaudited)

						Additional						Total
	Common Stock					Paid-in			Accumulated			Stockholders’
	Shares			Amount		Capital			Deficit			Equity
Balance, December 31, 2006		4,168,035		$	42	$	61,955		$	(17,158	)	$	44,839
Repurchased shares		(3,020	)		—		(23	)		—			(23	)
Net income		—			—		—			(885	)		(885	)
Balance, June 30, 2007		4,165,015		$	42	$	61,932		$	(18,043	)	$	43,931