Income Opportunity Realty Investors, Inc. (NYSE MKT: IOT), a Dallas-based real estate investment company, today reported results of operations for the second quarter ended June 30, 2013. IOT announced today that the Company reported net income applicable to common shares of $646,000 or $0.15 per diluted earnings per share for the period ended June 30, 2013, as compared to net income applicable to common shares of $998,000 or $0.024 per diluted earnings per share for the same period ended 2012.
Our primary business is investing in real estate and mortgage receivables. Land held for development or sale is our sole operating segment and as of June 30, 2013, our land consisted of approximately 170 acres of land located in Dallas, Texas. The principal source of revenue for the Company is interest income on over $25.4 million of note receivables due from related parties.
Interest income was $1.4 million for the three months ended June 30, 2013. This represents a decrease of $0.3 million as compared to the prior period interest income of $1.7 million. The majority of the decrease is due to the cash received on one of the surplus cash flow notes from Unified Housing Foundation, Inc., in the prior period. These were refinance proceeds received which allowed for the recognition of previously deferred interest income. This decrease was offset by an agreement made on January 1, 2013, where the Company extended the maturity on the surplus cash flow notes receivable from UHF for an additional term of five years in exchange for the early termination of the preferred interest rate. The original notes gave a five-year period of preferred interest rate at 5.25%, before returning to the original note rate of 12.0%.
General and administrative expenses were $261,000 for the three months ended June 30, 2013. This represents an increase of $54,000, as compared to the prior period general and administrative services of $207,000. The increase was primarily due to an increase in the cost reimbursements to our Advisor and professional fees, offset by a decrease in the net income fee due to our Advisor.