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<SEC-DOCUMENT>0000950134-05-018565.txt : 20050929
<SEC-HEADER>0000950134-05-018565.hdr.sgml : 20050929
<ACCEPTANCE-DATETIME>20050929171001
ACCESSION NUMBER:		0000950134-05-018565
CONFORMED SUBMISSION TYPE:	10-Q/A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050331
FILED AS OF DATE:		20050929
DATE AS OF CHANGE:		20050929

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INCOME OPPORTUNITY REALTY INVESTORS INC /TX/
		CENTRAL INDEX KEY:			0000949961
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				752615944
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14784
		FILM NUMBER:		051112023

	BUSINESS ADDRESS:	
		STREET 1:		1800 VALLEY VIEW LANE
		STREET 2:		SUITE 300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		4685224200

	MAIL ADDRESS:	
		STREET 1:		1800 VALLEY VIEW LANE
		STREET 2:		SUITE 300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q/A
<SEQUENCE>1
<FILENAME>d29089e10vqza.htm
<DESCRIPTION>AMENDMENT TO FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vqza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-Q/A</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(Mark One)
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 5(d) OF<BR>
THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>For the quarter year ended </B><FONT style="border-bottom: 1px solid #000000"> March&nbsp;31, 2005 </FONT>
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>OR</B></DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF<br>
THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission File Number 001-14784</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Income Opportunity Realty Investors, Inc.</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Nevada</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75-2615944</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of<BR>
Incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer Identification<BR>
Number)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>1755 Wittington Place, Suite&nbsp;340, Dallas, Texas</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75234</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of prinicpal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Registrant&#146;s Telephone Number, including area code <FONT style="border-bottom: 1px solid #000000"><B>214-750-5800 </B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(b) of the Act:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Title of Each Class</TD>
    <TD nowrap align="center" colspan="3">Name of each exchange on which registered</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Common Stock, $0.01 par value</B></TD>
    <TD nowrap align="center" colspan="3"><B>American Stock Exchange</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(g) of the Act: <B>None</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be
filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months
(or for such shorter period that the registrant was required to file such reports), and (2)&nbsp;has
been subject to such filing requirements for the past 90&nbsp;days. <B>Yes&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#111;</FONT></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation
S-K (&#167;229.405 of this chapter) is not contained herein, and will not be contained, to the best of
registrant&#146;s knowledge, in definitive proxy or information statements incorporated by reference in
Part&nbsp;III of this Form 10-K or any amendment to this Form
10-K.&nbsp;<B><FONT face="Wingdings">&#254;</FONT></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). <B>Yes&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No<FONT face="Wingdings">&#254;</FONT></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). <B>Yes&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No<FONT face="Wingdings">&#254;</FONT></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate market value of the shares of voting and non-voting common equity held by
non-affiliates of the Registrant, computed by reference to the closing sales price of the Common
Stock on the American Stock Exchange as of June&nbsp;30, 2004 (the last business day of the Registrant&#146;s
most recently completed second fiscal quarter) was $4,034,394 based upon a total of 298,844 shares
held as of June&nbsp;30, 2004 by persons believed to be non-affiliates of the Registrant. The basis of
the calculation does not constitute a determination by the Registrant as defined in Rule&nbsp;405 of the
Securities Act of 1933, as amended, such calculation, if made as of a date within sixty days of
this filing, would yield a different value. As of March&nbsp;18, 2005, there were 1,389,345 shares of
common stock outstanding.
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt">DOCUMENTS INCORPORATED BY REFERENCE<BR>
None</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>









<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>AMENDMENT NO. 2 TO </B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>QUARTERLY REPORT ON FORM 10-Q FOR</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>INCOME OPPORTUNITY REALTY INVESTORS, INC.</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>FOR THE QUARTER ENDED MARCH 31, 2005</B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby amends the following items, exhibits, or other portions
of its Quarterly Report on Form 10-Q for the quarter year ended March&nbsp;31, 2005 as set forth below
and as reflected in the substituted pages attached hereto which replace the same numbered pages in
the original filing and/or Amendment No.&nbsp;1 (this Amendment No.&nbsp;2 is necessitated by virtue of
certain comments of the Staff of the Securities and Exchange Commission by letter dated September
19, 2005):
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149; &nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pages 7-8 &#151; Item&nbsp;1. &#147;Financial Statements.&#148; Note 5 to the consolidated financial statements is further amended to provide enhanced disclosure with respect to the Metra transaction.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&#149; &nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibit&nbsp;31.1 &#151; Certification Required by Exchange Act Rules&nbsp;13a-14(a) and 15d-14(a).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
</DIV>
<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto
duly-authorized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date: September&nbsp;28, 2005.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">INCOME OPPORTUNITY REALTY<BR>
INVESTORS, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ R. Neil Crouch, II
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">R. Neil Crouch, II, Executive Vice President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">and Chief Financial Officer and Acting<br>
Principal Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">2


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;30, 2003, a Secured Promissory Note in the amount of $6,363,360 given by Housing
for Seniors of Humble, LLC (&#147;Humble&#148;) to NLP Lakeshore Villas, LLC (&#147;NLP&#148;) was assigned from
American Realty Investors, Inc. (&#147;ARI&#148;) to IORI as a paydown in the amount of $6,363,360 of certain
intercompany receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;30, 2003, a Secured Promissory Note in the amount of $2,000,000 given by Humble to NLP
was assigned from ARI to IORI as additional paydown in the amount of $2,000,000 of certain
intercompany receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;14, 2003, IORI purchased, sold and conveyed an office building known as One Hickory
Centre, and sold 202 acres of unimproved real property known as the Travelers Land in Dallas
County, Texas to Encino Executive Plaza, Ltd. The sale price for One Hickory Centre was
$12,200,000 and Encino Executive Plaza, Ltd. executed a wrap-around promissory note in the amount
of $11,973,025 payable to the order of IORI secured by a Deed of Trust encumbering One Hickory
Centre. The remaining difference of which was as a result of prorations and various expenses paid
by IORI in connection with the closing of the transaction. The note bears interest at 5.5% per
annum. The sale price for the Travelers Land was $25,000,000. At closing, Encino Executive Plaza,
Ltd. executed an all inclusive wrap-around promissory note payable to the order of IORI in the
principal amount of $22,801,987 secured by a Deed of Trust covering the Travelers Land sold and
delivered cash to IORI in the amount of $1,976,715. As with the prior transaction, the difference
between the purchase price and the promissory note represented adjustments for various prorations.
The note bears interest at 5.5% per annum. Subsequently, IORI made a loan to Encino Executive
Plaza, Ltd. in the amount of $1,567,232 payable upon demand or, if no demand is made prior thereto,
on June&nbsp;30, 2006, with a market rate of interest. Encino Executive Plaza, Ltd. executed and
delivered a promissory note payable to the order of IORI in the stated principal amount of
$1,567,232. The note bears interest at 5.5% per annum.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>NOTE 4. RECEIVABLE FROM AND PAYABLE TO AFFILIATES</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Related Party</I>. On September&nbsp;19, 2002, IORI&#146;s Board of Directors authorized the Chief Financial
Officer of the Company to advance funds either to or from the Company, through the advisor without
interest, in an amount up to $5&nbsp;million on the condition that such advances shall be repaid in cash
or transfers of assets within 90&nbsp;days. From time-to-time, IORI and its affiliates and related
parties have made unsecured advances to each other to fund their respective operations, which
generally have not had specific repayment terms and have been reflected in IORI&#146;s financial
statements as other assets. At March&nbsp;31, 2005 and 2004, IORI held a receivable of $261,000 from
TCI. IORI had payables of $1.5&nbsp;million and $1.3&nbsp;million to SWI at March&nbsp;31, 2005 and December&nbsp;31,
2004, respectively. See also NOTE 6. &#147;RELATED PARTY TRANSACTIONS.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>NOTE 5. NOTES AND INTEREST PAYABLE</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2002, the Company transferred all of its residential properties to partnerships formed
with Metra Capital LLC (&#147;Metra&#148;). The properties included the 60-unit Brighton Court, the 92-unit
Del Mar, the 68-unit Enclave, the 280-unit Meridian, the 57-unit Signature, and the 114-unit
Sinclair, all located in Midland, Texas, and the 106-unit Treehouse located in San Antonio, Texas.
Innovo Realty, Inc., a subsidiary of Innovo Group, Inc. (&#147;Innovo&#148;) is a limited partner in the
partnerships that purchased the properties. A former director of ARI, a related party, controlled
approximately 11.67% of the outstanding common stock of Innovo. The transfer constituted 23% of
the total assets of the Company as of December&nbsp;31, 2001. The transfer price for the properties
totaled $26.2&nbsp;million, of which the Company received $5.3&nbsp;million in cash after the payment of
$15.9&nbsp;million in debt and various closing costs. Management determined to account for the
transaction as a refinancing transaction (rather than a sale) in accordance with SFAS 66
&#147;Accounting for Sales of Real Estate.&#148; At the time of the transaction in April&nbsp;2002, ARI was a
related party to the Company by virtue of ARI&#146;s subsidiaries&#146; ownership of approximately 28.5% of
the then outstanding common stock of the Company, and the fact that ARI and the Company had the
same persons as executive officers. The compensation price for the properties transferred totaled
$26.2&nbsp;million and possible additional contingent consideration depending upon the sale price of the
properties by the Metra partnerships. The Company also received $5.2&nbsp;million in value of 8% in
non-recourse, non-convertible preferred stock of Innovo. Based upon the prospect of additional
consideration, ultimate continued involvement through the preferred stock and the related-party
nature of the former ARI director&#146;s involvement, as well as the Company retaining a right to
approve the price of any ultimate sale by a Metra partnership of the properties, and a process by
which the Company effectively guaranteed a preferential return to the Metra investors, management
determined that the transaction must be classified as a financing transaction and not a sale. The
Company continued to be able to exert control over the Metra partnerships, and no sale was
recorded. The Treehouse property was subsequently sold to a non-related party in February&nbsp;2004,
and all of its debts have been repaid to the lenders at the time of the sale. During August&nbsp;2004,
certain entities, including the Company, instituted an action in a Texas state court against Innovo
and Metra and
</DIV>
<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">others over the process, as well as distribution questions. During April&nbsp;2005, a resolution of the
litigation occurred settling all liabilities remaining from the original partnership arrangements
which included a return of the Metra investor equity, prepayment of prospective asset management
fees and miscellaneous fees and transaction costs from the Company and the other plaintiffs as a
payment of the Preferential Return along with the delegation of management to another entity. Of
the payment made, the Company recognized expense of $56,000 and a reduction of $1,476,000 in
liabilities during the second quarter of 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>NOTE 6. RELATED PARTY TRANSACTIONS</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;30, 2004, a Secured Promissory Note in the amount of $1,222,500 given by Unified
Housing Foundation, Inc. (&#147;UHF&#148;) for Unified Housing of Parkside Crossing, LLC to Regis Realty I,
LLC (&#147;Regis I&#148;) and the accrued interest receivable of $112,878 wee assigned from Regis I to IORI
as a paydown in the amount of $1,335,378 of certain intercompany receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;30, 2004, a Secured Promissory Note in the amount of $1,053,616 given by UHF for
Unified Housing of Temple, LLC to Regis I and the accrued interest receivable of $98,338 were
assigned from Regis I to IORI as a paydown in the amount of $1,151,954 of certain intercompany
receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;30, 2004, a Secured Promissory Note in the amount of $835,658 given by UHF for Unified
Housing of Terrell, LLC to Regis I and the accrued interest receivable of $80,223 were assigned
from Regis I to IORI as a paydown in the amount of $915,881 of certain intercompany receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;30, 2004, a Secured Promissory Note in the amount of $1,770,000 given by UHF for
Housing for Seniors of Lewisville, LLC to Regis I and the accrued interest receivable of $174,640
were assigned from Regis I to IORI as a paydown in the amount of $1,944,640 of certain intercompany
receivables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;24, 2004, a Secured Promissory Note in the amount of $2,990,000 given by UHF for UHM to
Transcontinental Eldorado, Inc. was assigned from TCI to IORI as a partial payment for TCI&#146;s
repurchase of 100% of the outstanding common shares of Treehouse-IR from IORI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;30, 2003, a Promissory Note in the amount of $6.3&nbsp;million given by Humble to NLP was
assigned from ARI to IORI. On December&nbsp;30, 2003, a Promissory Note in the amount of $2&nbsp;million
given by Humble to NLP was assigned from ARI to IORI. These assignements were payments in the
amount of $8.3&nbsp;million on certain intercompany receivables due to IORI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;19, 2002, IORI&#146;s Board of Directors authorized the Chief Financial Officer of the
Company to advance funds either to or from the Company, through the advisor, in an amount up to $5
million on the condition that such advances shall be repaid in cash or transfers of assets within
90&nbsp;days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table reconciles the beginning and ending balances of Accounts Receivable from
Affiliates as of March&nbsp;31, 2005:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">SWI</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">TCI</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, December&nbsp;31, 2004 (as restated)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,248</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash transfers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash repayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(592</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other additions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other repayments (as restated)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(210</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, March&nbsp;31, 2005 (as restated)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,497</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Returns on Metra Properties. </I>As described in Note 5, IORI sold all of its residential properties
during 2002 to partnerships controlled by Metra. The partnership agreement for each of these
partnerships states that the Metra Partners, as defined, receives cash flow distributions at least
quarterly in an amount sufficient to provide them with a fifteen percent cumulative compounded
annual rate of return on their invested capital, as well as a cumulative annual amount of 0.50% of
the average outstanding balance of the mortgage indebtedness secured by any of these residential
properties. These distributions to the Metra Partners are to have priority over distributions to
any of the other partners. See also ITEM 1. &#147;LEGAL PROCEEDINGS&#148; in PART II. &#147;OTHER INFORMATION&#148;
concerning resolution of other litigation and a reduction of liabilities of $1,476.000.
</DIV>



<P align="center" style="font-size: 10pt">8
</DIV>

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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>d29089exv31w1.htm
<DESCRIPTION>CERTIFICATION REQUIRED BY EXCHANGE ACT RULES 13A-14(A)/15D-14(A)
<TEXT>
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<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Robert N. Crouch II, Executive Vice President, Chief Financial Officer, and Acting Principal
Executive Officer, of Income Opportunity Realty Investors, Inc. (&#147;IORI&#148;), certify that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;I have reviewed this quarterly report and amendments on Form 10-Q/A of IORI;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Based on my knowledge, this quarterly report does not contain any untrue statements of a
material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Based on my knowledge, the financial statements, and other financial information included
in this quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this
report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;I am responsible for establishing and maintaining internal controls and procedures (as
defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules&nbsp;13(a)-15(f) and 15d-15(f) for the Registrant and have:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its
consolidated subsidiaries is made known to my by others within those entities,
particularly during the period in which this report is being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such internal controls over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the Registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluations; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in the report any change in the Registrant&#146;s internal control
over financial reporting that occurred during the Registrant&#146;s most recent
fiscal quarter (the Registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the Registrant&#146;s internal control over financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Registrant&#146;s auditors and the Audit Committee of the Registrant&#146;s Board of
Directors (or persons performing the equivalent functions):
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant&#146;s ability to record, process,
summarize and report financial information; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or other
employees who have a significant role in Registrant&#146;s internal controls.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Dated: September 28, 2005.&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Robert N. Crouch II
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Robert N. Crouch II, Executive Vice&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President, Chief Financial Officer and
Acting Principal Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">
</DIV>


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