Income Opportunity Realty Investors, Inc. Reports Third Quarter 2008 Results

In addition, the Company reported its year to date results. IOT reported net income applicable to common shares of $26.2 million or $6.30 per share for the nine months ended September 30, 2008 as compared to net loss applicable to common shares of ($705,000) or ($0.17) per share for the same period ended 2007.

Results of operations for the three months ended September 30, 2008 as compared to the same period ended 2007;

Rental and other property revenues decreased by $62,000 for the three months ended September 30, 2008 as compared to the same period ended 2007, due to a decrease in occupancy within our commercial portfolio.

Property operations expense increased by $15,000 for the three months ended September 30, 2008 as compared to the same period ended 2007, due to a slight increase in operating costs.

Interest income decreased by $657,000 for the three months ended September 30, 2008 as compared to the same period ended 2007, due to no longer accruing interest income on our notes receivables from Unified Housing Foundation, Inc., an affiliated entity.

Mortgage and loan interest expense decreased by $215,000 for the three months ended September 30, 2008 as compared to the same period ended 2007, due to the continued pay down on our existing mortgage balances.

Gain on involuntary conversion of $7.4 million is due to the receipt of insurance proceeds, in excess of the book value of the project, to an apartment complex in Indiana.

Net income fee expense increased by $1.1 million due to an increase in net income as compared to the prior period.

Income from discontinued operations increased by $243,000 as compared to same period ended 2007. Discontinued operations consists of seven apartment complexes.

Results of operations for the nine months ended September 30, 2008 as compared to the same period ended 2007;

Rental and other property revenues decreased by $112,000 for the nine months ended September 30, 2008 as compared to the same period ended 2007, due to a decrease in occupancy within our commercial portfolio.

Property operations increased by $477,000 for the nine months ended September 30, 2008 as compared to the same period ended 2007. The majority of the increase of $360,000 is due to an adjustment to reflect actual real estate taxes paid. The remaining increase is due to an increase in operating costs.

Interest income decreased by $1.5 million for the nine months ended September 30, 2008 as compared to the same period ended 2007, due to no longer accruing interest income on our notes receivables from Unified Housing Foundation, Inc., an affiliated entity.

Other income increased by $230,000 for the nine months ended September 30, 2008 as compared to the same period ended 2007, due to a tax refund received in the second quarter of 2008.

Mortgage and loan interest expense decreased by $348,000 for the nine month period ended September 30, 2008 as compared to same period ended 2007, due to the continued pay down on our existing mortgage balances.

Gain on involuntary conversion of $7.4 million is due to the receipt of insurance proceeds, in excess of the book value of the project, to an apartment complex in Indiana.

Net income fee expense increased by $868,000 due to an increase in net income as compared to the prior period.

Our loss in income from equity investees increased by ($410,000) as compared to the same period ended 2007 due to continued losses incurred on these investments.

Income from discontinued operations increased by $12.5 million for the nine months ended September 30, 2008 as compared to the same period ended 2007. The majority of the increase is from the gain on the sale of six apartment complexes, net of fees, operating losses and taxes on the properties sold.

About Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including office buildings, apartments and undeveloped land. For more information, go to IOT's website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the Three Months Ended For the Nine Months Ended September 30 September 30 2008 2007 2008 2007 (dollars in thousands) (dollars in thousands) Rents and other property revenues $ 336 $ 398 $ 965 $ 1,077 Property operations 147 132 1,046 569 Depreciation 64 58 182 172 General and administrative 152 103 436 365 Advisory fee to affiliate 218 227 667 805 Total operating expenses 581 520 2,331 1,911 Operating income (loss) (245 ) (122 ) (1,366 ) (834 ) Interest income 622 1,279 2,019 3,494 Other income - - 230 - Mortgage and loan interest (804 ) (1,019 ) (2,666 ) (3,014 ) Involuntary conversion 7,434 - 7,434 - Net income fee (1,055 ) - (873 ) (5 ) Total other income 6,197 260 6,144 475 Income (loss) before gain on land sales, equity in earnings of 5,952 138 4,778 (359 ) investees and minority interest Minority interests - (18 ) - (62 ) Equity in investees (2 ) (9 ) (434 ) (24 ) Income tax benefit (expense) 155 24 7,660 (91 ) Net income (loss) from continuing operations 6,105 135 12,004 (536 ) Discontinued operations 443 69 21,886 (260 ) Income tax benefit (expense) (155 ) (24 ) (7,660 ) 91 Net income (loss) from discontinued operations 288 45 14,226 (169 ) Net income (loss) applicable to common shares $ 6,393 $ 180 $ 26,230 $ (705 ) Net income (loss) from continuing operations 1.47 0.03 2.88 (0.13 ) Net income (loss) from discontinued operations 0.07 0.01 3.42 (0.04 ) Net income (loss) applicable to common shares $ 1.54 $ 0.04 $ 6.30 $ (0.17 ) Weighted average Common shares used in computing earnings per share 4,162,574 4,163,175 4,162,640 4,163,175

INCOME OPPORTUNITY REALTY INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (unaudited) September 30, December 31, 2008 2007 (dollars in thousands) Assets Real estate held for investment $ 39,371 $ 43,027 Less - accumulated depreciation (2,289 ) (2,456 ) 37,082 40,571 Real estate held for sale - 17,032 Notes and interest receivable from affiliates 28,528 27,441 Investment in real estate partnerships 98 532 Cash and cash equivalents 38 267 Receivables from affiliates 52,264 27,801 Other assets 851 2,663 $ 118,861 $ 116,307 Liabilities and Shareholders' Equity Liabilities: Notes and interest payable $ 43,983 $ 44,354 Liabilities related to assets held for sale - 25,152 Other liabilities 4,583 2,057 48,566 71,563 Commitments and contingencies - - Minority interest - 677 Shareholders' equity: Common Stock, $.01 par value, authorized 10,000,000 shares; issued 42 42 and outstanding 4,162,574 and 4,162,774 shares at 2008 and 2007, respectively. Treasury stock (39 ) (37 ) Paid-in capital 61,955 61,955 Accumulated earnings (deficit) 8,337 (17,893 ) 70,295 44,067 $ 118,861 $ 116,307

SOURCE: Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc. Investor Relations, 800-400-6407 investor.relations@primeasset.com