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                                                                    EXHIBIT 99.5



                            FIRESIDE THRIFT BUILDING

                              STATEMENT OF REVENUES
                          AND DIRECT OPERATING EXPENSES
                          YEAR ENDED DECEMBER 31, 1996



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                          Independent Auditors' Report



To the Board of Trustees
Income Opportunity Realty Investors, Inc.

We have audited the accompanying statement of revenues and direct operating
expenses of Fireside Thrift Building for the year ended December 31, 1996. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.

The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Income Opportunity Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.

In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of Fireside Thrift Building for the year ended December 31,
1996, in conformity with generally accepted accounting principles.




FARMER, FUQUA, HUNT & MUNSELLE, P.C.

Dallas, Texas
June 23, 1998


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                            FIRESIDE THRIFT BUILDING
                              STATEMENT OF REVENUES
                          AND DIRECT OPERATING EXPENSES
                          Year Ended December 31, 1996




                                                                          
REVENUES
     Net rental revenues .........................................    $  947,597
     Other revenues ..............................................        92,632
                                                                      ----------

     Total revenues ..............................................     1,040,229

DIRECT OPERATING EXPENSES
     Utilities ...................................................       150,615
     Repairs and maintenance .....................................       111,741
     Property taxes ..............................................        73,690
     Salaries and benefits .......................................        11,893
     Insurance ...................................................         7,502
                                                                      ----------

     Total direct operating expenses .............................       355,441
                                                                      ----------

REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES ..................    $  684,788
                                                                      ==========







         The accompanying notes are an integral part of this statement.


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                            FIRESIDE THRIFT BUILDING
                         NOTES TO STATEMENT OF REVENUES
                          AND DIRECT OPERATING EXPENSES
                                December 31, 1996


     NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

               Fireside Thrift Building is a 56,120 square-foot office building
               located in Newark, California. During 1996, the property was
               owned by 5600 Mowry School Road Corporation.

               The accompanying financial statement does not include a provision
               for depreciation and amortization, bad debt expense, interest
               expense, or income taxes. Accordingly, this statement is not
               intended to be a complete presentation of the results of
               operations.

     NOTE 2: ACCOUNTING ESTIMATES

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the reported amounts
               of revenues and expenses during the reporting period. Actual
               results could differ from those estimates.

     NOTE 3: OTHER REVENUES

               Other revenues consist of the following:


                                                                       
     Common area maintenance                                     $     57,505
     Other income                                                      17,145
     HVAC income                                                       14,885
     Late charge                                                        3,097
                                                                  -----------
                                                                 $     92,632
                                                                 ============


     NOTE 4: SUBSEQUENT EVENT

               The property was sold to Income Opportunity Realty Investors,
               Inc., a Nevada corporation, on December 31, 1997.