Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2012. IOT announced today that the Company reported net income applicable to common shares of $507,000 or $0.12 per diluted earnings per share for the period ended March 31, 2012, as compared to a net loss applicable to common shares of $307,000 or $0.07 per diluted earnings per share for the same period ended 2011.
Land held for development or sale is our sole operating segment. There was no income generated from this segment for the three months ended March 31, 2012, nor for the prior period ended March 31, 2011. Our primary source of revenue is from the interest income on $26.3 million of notes receivable due from affiliated and/or related parties.
Interest income was $1.2 million for the three months ended March 31, 2012. This represents an increase of $0.9 million as compared to the prior period interest income of $0.3 million. The increase was related to the note receivables from Unified Housing Foundation, an affiliated entity. Prior to January 1, 2012, on cash flow notes where payments are based upon surplus cash from operations, accrued but unpaid interest income was only recognized to the extent that cash was received. As of January 1, 2012, due to the consistency of cash received on the surplus cash notes over the past several years, we are recording interest as earned.
Property operating expenses were $31,000 for the three months ended March 31, 2012. This represents an increase of $22,000, as compared to the prior period operating expenses of $9,000. There was an increase in the land portfolio of $27,000 and a decrease in the other portfolio of $5,000. The increase in the land portfolio was due to an increase in POA fees billed for 1st quarter and the 2nd half of 2011. The decrease in the other portfolio was due to a decrease in professional fees.