----

----

----

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| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

----

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|                                                          |                                |
|---------------------------------------------------------------|-------------------------------------|
| Nevada                                                        | 75-2615944                          |
| (State or Other Jurisdiction ofIncorporation or Organization) | (I.R.S. EmployerIdentification No.) |

----

|                                                                                                                                     |                                 |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|--------|
| Large accelerated filer    ̈                                                                                     | Accelerated filer               |  ̈ |
|                                                                                                                                     |                                 |   |
| Non-accelerated filer      ̈ (Do not check if smaller reporting company) | Smaller reporting  company | x      |

|                         |                            |
|------------------------------|---------------------------------|
| Common Stock, $.01 par value | 4,168,214                       |
| (Class)                      | (Outstanding at August 5, 2011) |

----

|                          |                                                                                                                                              |                                                           |
|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
| PART I. FINANCIAL INFORMATION |                                                                                                                                              |
|                          |                                                                                                                                              |                                                           |
| Item 1.                  | Financial Statements                                                                                                                              |                                                           |
|                          | Consolidated Balance Sheets at June 30, 2011 (unaudited) and December 31, 2010                                                                    |           3  |
|                          | Consolidated Statements of Operations for the six months ended June 30, 2011 and 2010 and the six months ended June 30, 2011 and 2010 (unaudited) |           4  |
|                          | Consolidated Statement of Shareholders’ Equity for the six months ended June 30, 2011 (unaudited)                                           |           5  |
|                          | Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (unaudited)                                                 |           6  |
|                          | Notes to Financial Statements                                                                                                                     |           7  |
| Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                       |           14 |
| Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk                                                                                        |           21 |
| Item 4.                  | Controls and Procedures                                                                                                                           |           21 |
|                          |                                                                                                                                              |
| PART II. OTHER INFORMATION    |                                                                                                                                              |
|                          |                                                                                                                                              |                                                           |
| Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                       |           22 |
| Item 6.                       | Exhibits                                                                                                                                          |           23 |
| SIGNATURES                    |           24                                                                                    |

----

| ITEM  1. | FINANCIAL STATEMENTS |
|---------------|----------------------|

| INCOME OPPORTUNITY REALTY INVESTORS, INC.                                                                                   |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                                                 |   |
| (unaudited)                                                                                                                 |   |
|                                                                                                                        |   | June 30, |   |   | December 31, |   |
|                                                                                                                        |   | 2011 |   |   | 2010 |   |
|                                                                                                                        |   | (dollars in thousands, except share and par value amounts) |   |
| Assets                                                                                                                      |   |   |   |   |   |   |
| Real estate land holdings, at cost                                                                                          |   | $ | 24,511 |   |   | $ | 24,511 |   |
| Real estate subject to sales contracts, at cost                                                                             |   |   | 3,576 |   |   |   | 5,050 |   |
| Total real estate                                                                                                           |   |   | 28,087 |   |   |   | 29,561 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Notes and interest receivable from related parties                                                                          |   |   | 35,820 |   |   |   | 38,405 |   |
|    Less allowance for doubtful accounts                                                                      |   |   | (1,826 | ) |   |   | (1,826 | ) |
| Total notes and interest receivable                                                                                         |   |   | 33,994 |   |   |   | 36,579 |   |
| Cash and cash equivalents                                                                                                   |   |   | 42 |   |   |   | 20 |   |
| Investments in unconsolidated subsidiaries and investees, subject to sales contract                                         |   |   | 39 |   |   |   | 89 |   |
| Receivable and accrued interest from related parties                                                                        |   |   | 52,307 |   |   |   | 48,598 |   |
| Other assets                                                                                                                |   |   | 2,163 |   |   |   | 2,240 |   |
| Total assets                                                                                                                |   | $ | 116,632 |   |   | $ | 117,087 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders’ Equity                                                                                  |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                |   |   |   |   |   |   |   |   |
| Notes and interest payable                                                                                                  |   | $ | 35,577 |   |   | $ | 34,214 |   |
| Notes and interest payable related to subject to sales contracts                                                            |   |   | 2,387 |   |   |   | 2,390 |   |
| Deferred revenue (from sales to related parties)                                                                            |   |   | 6,550 |   |   |   | 6,550 |   |
|    Accounts payable and other liabilities (including $1 in 2011 and $1 in 2010 to affiliated and related parties) |   |   | 418 |   |   |   | 401 |   |
|                                                                                                                        |   |   | 44,932 |   |   |   | 43,555 |   |
| Commitments and contingencies:                                                                                              |   |   |   |   |   |   |   |   |
| Shareholders’ equity:                                                                                                 |   |   |   |   |   |   |   |   |
| Common stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675 shares in 2011 and 2010                        |   |   | 42 |   |   |   | 42 |   |
| Treasury stock at cost, 5,461 in 2011 and 2010                                                                              |   |   | (39 | ) |   |   | (39 | ) |
| Paid-in capital                                                                                                             |   |   | 61,955 |   |   |   | 61,955 |   |
| Retained earnings                                                                                                           |   |   | 9,742 |   |   |   | 11,574 |   |
| Total shareholders' equity                                                                                                  |   |   | 71,700 |   |   |   | 73,532 |   |
| Total liabilities and shareholders' equity                                                                                  |   | $ | 116,632 |   |   | $ | 117,087 |   |

----

| INCOME OPPORTUNITY REALTY INVESTORS, INC.                                                                                                                                                    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                                                        |   |
| (unaudited)                                                                                                                                                                                  |   |
|                                                                                                                                                                                         |   | For the Three Months Ended June 30, |   |   | For the Six Months Ended June 30, |   |
|                                                                                                                                                                                         |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |
|                                                                                                                                                                                         |   | (dollars in thousands, except share and per share amounts) |   |
| Revenues:                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental and other property revenues (including $77 and $65 for the three months ended, $153 and $126 for the six months ended 2011 and 2010 respectively from affiliates and related parties) |   | $ | 77 |   |   | $ | 65 |   |   | $ | 159 |   |   | $ | 126 |   |
|                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property operating expenses (including $2 and $0 for the three months ended, $4 and $0 for the six months ended 2011 and 2010 respectively from affiliates and related parties)              |   |   | (11 | ) |   |   | 35 |   |   |   | 46 |   |   |   | 87 |   |
| General and administrative (including $61 and $53 for the three months ended, $116 and $62 for the six months ended 2011 and 2010 respectively from affiliates and related parties)          |   |   | 181 |   |   |   | 123 |   |   |   | 278 |   |   |   | 179 |   |
| Provision on impairment of real estate assets                                                                                                                                                |   |   | 1,474 |   |   |   | - |   |   |   | 1,474 |   |   |   | - |   |
| Advisory fee to affiliates                                                                                                                                                                   |   |   | 211 |   |   |   | 216 |   |   |   | 431 |   |   |   | 434 |   |
|      Total operating expenses                                                                                                                                       |   |   | 1,855 |   |   |   | 374 |   |   |   | 2,229 |   |   |   | 700 |   |
|      Operating loss                                                                                                                                                 |   |   | (1,778 | ) |   |   | (309 | ) |   |   | (2,070 | ) |   |   | (574 | ) |
|                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income from related party notes receivable                                                                                                                                          |   |   | 723 |   |   |   | 621 |   |   |   | 1,017 |   |   |   | 1,330 |   |
| Mortgage and loan interest                                                                                                                                                                   |   |   | (420 | ) |   |   | (330 | ) |   |   | (729 | ) |   |   | (663 | ) |
| Earnings from unconsolidated subsidiaries and investees                                                                                                                                      |   |   | (50 | ) |   |   | - |   |   |   | (50 | ) |   |   | 3 |   |
|         Total other income (expenses)                                                                                                                |   |   | 253 |   |   |   | 291 |   |   |   | 238 |   |   |   | 670 |   |
| Income (loss) before gain on land sales, non-controlling interest, and taxes                                                                                                                 |   |   | (1,525 | ) |   |   | (18 | ) |   |   | (1,832 | ) |   |   | 96 |   |
| Income (loss) from continuing operations before tax                                                                                                                                          |   |   | (1,525 | ) |   |   | (18 | ) |   |   | (1,832 | ) |   |   | 96 |   |
|    Income tax benefit                                                                                                                                                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 48 |   |
| Net income (loss)                                                                                                                                                                            |   |   | (1,525 | ) |   |   | (18 | ) |   |   | (1,832 | ) |   |   | 144 |   |
|                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share - basic                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Income (loss) from continuing operations                                                                                                                                   |   | $ | (0.37 | ) |   | $ | - |   |   | $ | (0.44 | ) |   | $ | 0.03 |   |
|    Net income (loss) applicable to common shares                                                                                                                              |   | $ | (0.37 | ) |   | $ | - |   |   | $ | (0.44 | ) |   | $ | 0.03 |   |
|                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share - diluted                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Income (loss) from continuing operations                                                                                                                                   |   | $ | (0.37 | ) |   | $ | - |   |   | $ | (0.44 | ) |   | $ | 0.03 |   |
|    Net income (loss) applicable to common shares                                                                                                                              |   | $ | (0.37 | ) |   | $ | - |   |   | $ | (0.44 | ) |   | $ | 0.03 |   |
|                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common share used in computing earnings per share                                                                                                                           |   |   | 4,168,214 |   |   |   | 4,168,214 |   |   |   | 4,168,214 |   |   |   | 4,168,214 |   |
| Weighted average common share used in computing diluted earnings per share                                                                                                                   |   |   | 4,168,214 |   |   |   | 4,168,214 |   |   |   | 4,168,214 |   |   |   | 4,168,214 |   |

----

| INCOME OPPORTUNITY REALTY INVESTORS, INC.            |   |
|------------------------------------------------------|--------|
| CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY |   |
| For the Six Months Ended June 30, 2011               |   |
| (unaudited)                                          |   |
| (dollars in thousands)                               |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |   |   |   | Common Stock |   |   | Treasury |   |   | Paid-in |   |   | Retained |   |
|                                                 |   | Total |   |   | Shares |   |   | Amount |   |   | Stock |   |   | Capital |   |   | Earnings |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                           |   | $ | 73,532 |   |   |   | 4,173,675 |   |   | $ | 42 |   |   | $ | (39 | ) |   | $ | 61,955 |   |   | $ | 11,574 |   |
| Net loss                                             |   |   | (1,832 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,832 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, June 30, 2011                               |   | $ | 71,700 |   |   |   | 4,173,675 |   |   | $ | 42 |   |   | $ | (39 | ) |   | $ | 61,955 |   |   | $ | 9,742 |   |

----

| INCOME OPPORTUNITY REALTY INVESTORS, INC.                                                                                                                                                                                               |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                                                                                   |   |
| (unaudited)                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                    |   | For the Six Months Ended |   |
|                                                                                                                                                                                                                                    |   | June 30, |   |
|                                                                                                                                                                                                                                    |   | 2011 |   |   | 2010 |   |
|                                                                                                                                                                                                                                    |   | (dollars in thousands) |   |
| Cash Flow From Operating Activities:                                                                                                                                                                                                    |   |   |   |   |   |   |
| Net income (loss) applicable to common shares                                                                                                                                                                                           |   | $ | (1,832 | ) |   | $ | 144 |   |
| Adjustments to reconcile net income (loss) applicable to common  shares to net cash used in operating activities:                                                                                                                  |   |
|                    Depreciation and amortization                                                                                         |   |   | - |   |   |   | 3 |   |
|                    Earnings from unconsolidated subsidiaries and investees                                                               |   |   | 50 |   |   |   | (3 | ) |
|                    Provision on impairment of real estate assets                                                                         |   |   | 1,474 |   |   |   | - |   |
|       (Increase) decrease in assets:                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                    Accrued interest receivable                                                                                           |   |   | - |   |   |   | (500 | ) |
|                    Other assets                                                                                                          |   |   | 61 |   |   |   | (141 | ) |
|       Increase (decrease) in liabilities:                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|                    Accrued interest payable                                                                                              |   |   | 948 |   |   |   | 94 |   |
|                    Other liabilities                                                                                                     |   |   | 25 |   |   |   | (10 | ) |
|                               Net cash provided by (used in) operating activities |   |   | 726 |   |   |   | (413 | ) |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Cash Flow From Investing Activities:                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|       Proceeds from notes receivable                                                                                                                                                                      |   |   | 2,585 |   |   |   | 2,371 |   |
|       Affiliate receivable                                                                                                                                                                                |   |   | (3,709 | ) |   |   | (1,728 | ) |
|                               Net cash provided by (used in) investing activities |   |   | (1,124 | ) |   |   | 643 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Cash Flow From Financing Activities:                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|       Payments on notes payable                                                                                                                                                                           |   |   | 414 |   |   |   | (234 | ) |
|       Deferred financing costs                                                                                                                                                                            |   |   | 6 |   |   |   | 5 |   |
|                               Net cash provided by (used in) financing activities |   |   | 420 |   |   |   | (229 | ) |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                                                                                                                                                               |   |   | 22 |   |   |   | 1 |   |
| Cash and cash equivalents, beginning of period                                                                                                                                                                                          |   |   | 20 |   |   |   | 2 |   |
| Cash and cash equivalents, end of period                                                                                                                                                                                                |   | $ | 42 |   |   | $ | 3 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                                                                                                                                                  |   | $ | 716 |   |   | $ | 652 |   |
| Cash received for income taxes                                                                                                                                                                                                          |   | $ | - |   |   | $ | 48 |   |

----

----

----

|                 |                                                                                                                                                                                                                       |
|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 1 – | Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets.                                                                                                                           |
| Level 2 –      | Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 –      | Unobservable inputs that are significant to the fair value measurement.                                                                                                                                                    |

----

| Borrower                     | Date                                                   |   | Rate   |     | Amount                                                                   |                                                                                                | Security                 |
|------------------------------|--------------------------------------------------------|--------|--------|----------|--------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|--------------------------|
| Performing loans:            |                                                   |   |   |     |                                                                     |                                                                                                |                     |
|                         | Transcontinental Realty Investors, Inc. (Centura Land) | 09/14  |   | prime+2% |  $          6,900 |                                                                                                | 10 acres of Centura Land |
|                         | Unified Housing Foundation, Inc. (Lakeshore Villas)    | 12/27  |   | 5.25%    |                                                                     |              2,000                 |                     | Unsecured |
|                         | Unified Housing Foundation, Inc. (Lakeshore Villas)    | 12/27  |   | 5.25%    |                                                                     |              6,363                 |                     | Membership interest in Housing for Seniors of Humble, LLC |
|                         | United Housing Foundation, Inc. (Cliffs of El Dorado)  | 12/27  |   | 5.25%    |                                                                     |              2,990                 |                     | 100% Interest in Unified Housing of McKinney, LLC |
|                         | United Housing Foundation, Inc. (Echo Station)         | 12/27  |   | 5.25%    |                                                                     |              1,481                 |                     | 100% Interest in Unified Housing of Temple, LLC |
|                         | United Housing Foundation, Inc. (Limestone Canyon)     | 07/15  |   | 5.25%    |                                                                     |              3,057                 |                     | 100% Interest in Unified Housing of Austin, LLC |
|                         | United Housing Foundation, Inc. (Limestone Ranch)      | 07/15  |   | 5.25%    |                                                                     |              2,250                 |                     | 100% Interest in Unified Housing of Vista Ridge, LLC |
|                         | United Housing Foundation, Inc. (Parkside Crossing)    | 12/27  |   | 5.25%    |                                                                     |              1,936                 |                     | 100% Interest in Unified Housing of Parkside Crossing, LLC |
|                         | United Housing Foundation, Inc. (Sendero Ridge)        | 07/15  |   | 5.25%    |                                                                     |              5,174                 |                     | 100% Interest in Unified Housing of Sendero Ridge, LLC |
|                         | United Housing Foundation, Inc. (Timbers of Terrell)   | 12/27  |   | 5.25%    |                                                                     |              1,323                 |                     | 100% Interest in Unified Housing of Terrell, LLC |
|                         | United Housing Foundation, Inc. (Tivoli)               | 12/27  |   | 5.25%    |                                                                     |              1,826                 |                     | 100% Interest in Unified Housing of Tivoli, LLC |
|                         | Accrued interest                                       |   |   |     |                                                                     |                 520 |                     |   |
| Total Performing             |                                                   |   |   |     |  $        35,820            |                                                                                                |                     |
|                         |                                                   |   |   |     |                                                                     |                                                                                                |                     |   |
|                         | Allowance for estimated losses                         |   |   |     |                                                                     |            (1,826)                           |                     |   |
| Total                        |                                                   |   |   |     |  $        33,994            |                                                                                                |                     |
|                         |                                                   |   |   |     |                                                                     |                                                                                                |                     |   |
| All are related party notes. |                                                   |   |   |     |                                                                     |                                                                                                |                     |

| Project                                     | Maturity |   | Principal Balance |   |
|---------------------------------------------|----------|--------|-------------------|--------|
| Centura Land                                | 09/18/14 |   | $                 | 6,900  |   |
| Eagle Crest                                 | 11/01/11 |   |              | 2,367  |   |
| Three Hickory                               | 06/01/20 |   |              | 5      |   |
| Mercer Crossing/Travelers Land  * | 08/10/11 |   |              | 27,635 |   |
| Accrued interest                            |     |   |              | 1,057  |   |
|                                        |     |   |              |   |   |
|                                        |     |   | $                 | 37,964 |   |

----

|                       |                          |   | TCI    |   |   | Prime  |   |   | Pillar |   |   | Total  |   |
|----------------------------|-------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Balance, December 31, 2010 |                          | $      | 48,598 |   |   | $      | -      |   |   | $      | -      |   |   | $ | 48,598 |   |
|                       | Cash transfers                |   |   | -      |   |   |   | 2,409  |   |   |   | (66    | )      |   |   | 2,343 |   |
|                       | Advisory fees                 |   |   | -      |   |   |   | (293   | )      |   |   | (138   | )      |   |   | (431 | ) |
|                       | Cost reimbursements           |   |   | -      |   |   |   | (116   | )      |   |   | -      |   |   |   | (116 | ) |
|                       | Expenses paid by advisor      |   |   | -      |   |   |   | 73     |   |   |   | 108    |   |   |   | 181 |   |
|                       | Financing (mortgage payments) |   |   | -      |   |   |   | 718    |   |   |   | -      |   |   |   | 718 |   |
|                       | Interest income               |   |   | 377    |   |   |   | 640    |   |   |   | -      |   |   |   | 1,017 |   |
|                       | POA fees                      |   |   | -      |   |   |   | (2     | )      |   |   | -      |   |   |   | (2 | ) |
|                       | Property transfers            |   |   | -      |   |   |   | -      |   |   |   | (1     | )      |   |   | (1 | ) |
|                       | Purchase of obligation        |   |   | 3,332  |   |   |   | (3,429 | )      |   |   | 97     |   |   |   | - |   |
| Balance, June 30, 2011     |                          | $      | 52,307 |   |   | $      | -      |   |   | $      | -      |   |   | $ | 52,307 |   |

| For the Three Months Ended June 30, 2011 |   | Land   |   |   | Other  |   |   | Total  |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Operating revenue                        |   | $      | 77     |   |   | $      | -      |   |   | $ | 77 |   |
| Operating expenses                       |   |   | (13    | )      |   |   | 2      |   |   |   | (11 | ) |
| Depreciation and amortization            |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Mortgage and loan interest               |   |   | 420    |   |   |   | -      |   |   |   | 420 |   |
| Interest income                          |   |   | -      |   |   |   | 723    |   |   |   | 723 |   |
| Gain on land sales                       |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Segment operating income (loss)          |   | $      | (330   | )      |   | $      | 721    |   |   | $ | 391 |   |
| Capital expenditures                     |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Assets                                   |   |   | 28,087 |   |   |   | -      |   |   |   | 28,087 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| For the Three Months Ended June, 2010    |   | Land   |   |   | Other  |   |   | Total  |   |
| Operating revenue                        |   | $      | 65     |   |   | $      | -      |   |   | $ | 65 |   |
| Operating expenses                       |   |   | 38     |   |   |   | (3     | )      |   |   | 35 |   |
| Depreciation and amortization            |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Mortgage and loan interest               |   |   | 330    |   |   |   | -      |   |   |   | 330 |   |
| Interest income                          |   |   | -      |   |   |   | 621    |   |   |   | 621 |   |
| Gain on land sales                       |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Segment operating income (loss)          |   | $      | (303   | )      |   | $      | 624    |   |   | $ | 321 |   |
| Capital expenditures                     |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Assets                                   |   |   | 29,561 |   |   |   | -      |   |   |   | 29,561 |   |

----

|                                        |   | For the Three Months Ended |   |
|---------------------------------------------|--------|----------------------------|--------|
|                                        |   | June 30,                   |   |
|                                        |   | 2011                       |   |   | 2010 |   |
| Segment operating income                    |   | $                          | 391    |   |   | $ | 321 |   |
| Other non-segment items of income (expense) |   |                       |   |   |   |
| General and administrative                  |   |                       | (181   | ) |   |   | (123 | ) |
| Advisory fee                                |   |                       | (211   | ) |   |   | (216 | ) |
| Provision on impairment                     |   |                       | (1,474 | ) |   |   |   |   |
| Equity in earnings of investees             |   |                       | (50    | ) |   |   | - |   |
| Deferred tax benefit                        |   |                       | -      |   |   |   | - |   |
| Loss from continuing operations             |   | $                          | (1,525 | ) |   | $ | (18 | ) |

|                                    |   | June 30, |    |
|-----------------------------------------|--------|----------|---------|
|                                    |   | 2011     |    |   | 2010 |   |
| Segment assets                          |   | $        | 28,087  |   |   | $ | 29,561 |   |
| Investments in real estate partnerships |   |     | 39      |   |   |   | 89 |   |
| Other assets and receivables            |   |     | 88,506  |   |   |   | 87,437 |   |
| Total assets                            |   | $        | 116,632 |   |   | $ | 117,087 |   |

| For the Six Months Ended June 30, 2011 |   | Land   |   |   | Other  |   |   | Total  |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Operating revenue                      |   | $      | 159    |   |   | $      | -      |   |   | $ | 159 |   |
| Operating expenses                     |   |   | 39     |   |   |   | 7      |   |   |   | 46 |   |
| Depreciation and amortization          |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Mortgage and loan interest             |   |   | 729    |   |   |   | -      |   |   |   | 729 |   |
| Interest income                        |   |   | -      |   |   |   | 1,017  |   |   |   | 1,017 |   |
| Gain on land sales                     |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Segment operating income (loss)        |   | $      | (609   | )      |   | $      | 1,010  |   |   | $ | 401 |   |
| Capital expenditures                   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Assets                                 |   |   | 28,087 |   |   |   | -      |   |   |   | 28,087 |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| For the Six Months Ended June 30, 2010 |   | Land   |   |   | Other  |   |   | Total  |   |
| Operating revenue                      |   | $      | 126    |   |   | $      | -      |   |   | $ | 126 |   |
| Operating expenses                     |   |   | 86     |   |   |   | 1      |   |   |   | 87 |   |
| Depreciation and amortization          |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Mortgage and loan interest             |   |   | 663    |   |   |   | -      |   |   |   | 663 |   |
| Interest income                        |   |   | -      |   |   |   | 1,330  |   |   |   | 1,330 |   |
| Gain on land sales                     |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Segment operating income (loss)        |   | $      | (623   | )      |   | $      | 1,329  |   |   | $ | 706 |   |
| Capital expenditures                   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Assets                                 |   |   | 29,561 |   |   |   | -      |   |   |   | 29,561 |   |

----

|                                        |   | For the Six Months Ended |   |
|---------------------------------------------|--------|--------------------------|--------|
|                                        |   | June 30,                 |   |
|                                        |   | 2011                     |   |   | 2010 |   |
| Segment operating income                    |   | $                        | 401    |   |   | $ | 706 |   |
| Other non-segment items of income (expense) |   |                     |   |   |   |
| General and administrative                  |   |                     | (278   | ) |   |   | (179 | ) |
| Advisory fee                                |   |                     | (431   | ) |   |   | (434 | ) |
| Provision on impairment                     |   |                     | (1,474 | ) |   |   |   |   |
| Equity in earnings of investees             |   |                     | (50    | ) |   |   | 3 |   |
| Deferred tax benefit                        |   |                     | -      |   |   |   | 48 |   |
| Income (loss) from continuing operations    |   | $                        | (1,832 | ) |   | $ | 144 |   |

|                                    |   | June 30, |    |
|-----------------------------------------|--------|----------|---------|
|                                    |   | 2011     |    |   | 2010 |   |
| Segment assets                          |   | $        | 28,087  |   |   | $ | 29,561 |   |
| Investments in real estate partnerships |   |     | 39      |   |   |   | 89 |   |
| Other assets and receivables            |   |     | 88,506  |   |   |   | 87,437 |   |
| Total assets                            |   | $        | 116,632 |   |   | $ | 117,087 |   |

----

|   | • | general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | risks associated with the availability and terms of construction and mortgage financing and the use of debt to fund acquisitions and developments; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | demand for apartments and commercial properties in the Company’s markets and the effect on occupancy and rental rates; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | the Company’s ability to obtain financing, enter into joint venture arrangements in relation to or self-fund the development or acquisition of properties; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | risks associated with the timing and amount of property sales and the resulting gains/losses associated with such sales; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

|   | • | failure to manage effectively our growth and expansion into new markets or to integrate acquisitions successfully; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

|   | • | risks and uncertainties affecting property development and construction (including, without limitation, construction delays, cost overruns, inability to obtain necessary permits and public opposition to such activities); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | costs of compliance with the Americans with Disabilities Act and other similar laws and regulations; |
|--------|---------|------------------------------------------------------------------------------------------------------|

|   | • | potential liability for uninsured losses and environmental contamination; and |
|--------|---------|-------------------------------------------------------------------------------|

|   | • | risks associated with our dependence on key personnel whose continued service is not guaranteed. |
|--------|---------|--------------------------------------------------------------------------------------------------|

----

----

----

|                      |                                                                                                                                                                                                                       |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 1 – | Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets.                                                                                                                           |
| Level 2 – | Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 – | Unobservable inputs that are significant to the fair value measurement.                                                                                                                                                    |

----

----

|   | • | meet debt service requirements including balloon payments; |
|--------|---------|------------------------------------------------------------|

|   | • | fund normal recurring expenses; |
|--------|---------|---------------------------------|

|   | • | fund capital expenditures; and |
|--------|---------|--------------------------------|

|   | • | fund new property acquisitions. |
|--------|---------|---------------------------------|

|                                                |   | June 30, |   |   |   |   |
|-----------------------------------------------------|--------|----------|--------|--------|--------|--------|
|                                                |   | 2011     |   |   | 2010   |   |   | Variance |   |
|                                                |   |     |   |   |   |   |   |   |   |
| Net cash provided by (used in) operating activities |   | $        | 726    |   |   | $      | (413 | ) |   | $ | 1,139 |   |
| Net cash provided by (used in) investing activities |   | $        | (1,124 | )      |   | $      | 643 |   |   | $ | (1,767 | ) |
| Net cash provided by (used in) financing activities |   | $        | 420    |   |   | $      | (229 | ) |   | $ | 649 |   |

----

----

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK |
|--------------|----------------------------------------------------------------|

|                                            |   |    |   |   | Weighted           |   |   | Effect of 1% |   |
|-------------------------------------------------|--------|---------|--------|--------|--------------------|--------|--------|------------------------|--------|
|                                            |   |    |   |   | Average            |   |   | Increase In            |   |
|                                            |   | Balance |   |   | Interest Rate |   |   | Base Rates             |   |
| Notes payable:                                  |   |    |   |   |               |   |   |                   |   |
| Variable rate                                   |   | $       | 34,535 |   |               |   | 4.70   | %                      |   | $ | 345 |   |
| Total decrease in IOT’s annual net income |   |    |   |   |               |   |   |                   |   |   | 345 |   |
| Per share                                       |   |    |   |   |               |   |   |                   |   | $ | 0.08 |   |

| ITEM  4. | CONTROLS AND PROCEDURES |
|---------------|-------------------------|

----

| ITEM  2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|---------------|-------------------------------------------------------------|

|                                    |   |                      |   |   |                     |   |   | Total Number of          |      |   | Maximum Number of |   |
|-----------------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|--------|------------------------------------|-----------|--------|-----------------------------|--------|
|                                    |   |                      |   |   |                     |   |   | Shares Purchased              |      |   | Shares that May             |   |
|                                    |   | Total Number of |   |   | Average Price       |   |   | as Part of Publicly |      |   | Yet be Purchased            |   |
| Period                                  |   | Shares Purchased     |   |   | Paid per Share |   |   | Announced Program             |      |   | Under the Program           |   |
| Balance as of  March 31, 2011 |   |                      |   |   |                     |   |   |                               | 1,034,761 |   |                        |   | 615,239 |   |
|  April 30, 2011                    |   |                      | -      |   |                     |   | -      |                               |      |   | 1,034,761                   |   |   |   | 615,239 |   |
|  May 31, 2011                      |   |                      | -      |   |                     |   | -      |                               |      |   | 1,034,761                   |   |   |   | 615,239 |   |
|  June 30, 2011                     |   |                      | -      |   |                     |   | -      |                               |      |   | 1,034,761                   |   |   |   | 615,239 |   |
|                                    |   |                      |   |   |                     |   |   |                               |      |   |                        |   |   |   |   |   |
| Total                                   |   |                      | -      |   |                     |   |   |                               |      |   |                        |   |   |   |   |   |

----

| ITEM 6. | EXHIBITS |
|--------------|----------|

|          |   |                                                                                                                                                                                                                                                          |
|---------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |   | Description                                                                                                                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                          |
| 3.0           |   | Articles of Incorporation of Income Opportunity Realty Investors, Inc., (incorporated by reference to Appendix C to the Registrant’s Registration Statement on Form S-4, dated February 12, 1996).                                                      |
|          |   |                                                                                                                                                                                                                                                          |
| 3.1           |   | Bylaws of Income Opportunity Realty Investors, Inc. (incorporated by reference to Appendix D to the Registrant’s Registration Statement on Forms S-4 dated February 12, 1996).                                                                          |
|          |   |                                                                                                                                                                                                                                                          |
| 10.0          |   | Advisory Agreement dated as of April 30, 2011 between Income Opportunity Realty Investors, Inc. and Pillar Income Asset Management, Inc. (incorporated by reference to Exhibit 10.3 to the registrant’s current on Form 10-Q for event of May 2, 2011). |
|          |   |                                                                                                                                                                                                                                                          |
|  31.1*   |   | Certification by the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|          |   |                                                                                                                                                                                                                                                          |
|  31.2*   |   | Certification by the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.                                                                                                                    |
|          |   |                                                                                                                                                                                                                                                          |
|  32.1*   |   | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                        |

| * | Filed herewith |
|---|----------------|

----

|                  |                                                  |                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------|-------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   INCOME OPPORTUNITY REALTY INVESTORS, INC. |
|                  |                                                  |                                                                                                                                                                                                                                                                                                                                                                                             |
| Date: August 15, 2011 | By:                                                   | /s/ Daniel J. Moos                                                              |
|                  |                                                  | Daniel J. Moos                                                                                                                                                                                                                                                                                                                                                                                   |
|                  |                                                  | President and Chief Executive Officer(Principal Executive Officer)                                                                                                                                                                                                                                                                                                                               |
|                  |                                                  |                                                                                                                                                                                                                                                                                                                                                                                             |
| Date: August 15, 2011 | By:                                                   | /s/ Gene S. Bertcher                                                                      |
|                  |                                                  | Gene S. Bertcher                                                                                                                                                                                                                                                                                                                                                                                 |
|                  |                                                  | Executive Vice President and Chief Financial Officer(Principal Financial Officer)                                                                                                                                                                                                                                                                                                                |

----

|          |   |                                                                                                                                       |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber |   | Description                                                                                                                                |
|          |   |                                                                                                                                       |
|  31.1*   |   | Certification by the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. |
|          |   |                                                                                                                                       |
|  31.2*   |   | Certification by the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. |
|          |   |                                                                                                                                       |
|  32.1*   |   | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                     |

| * | Filed herewith |
|---|----------------|

----