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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 1, 2009

Paladin Realty Income Properties, Inc.

(Exact Name of Registrant as Specified in Charter)

10880 Wilshire Blvd., Suite 1400

Los Angeles, California 90024

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (310) 996-8704

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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We previously filed a Current Report on Form 8-K on October 7, 2009, reporting our acquisition of our interest in Lofton Place Apartments, located in Tampa, Florida, as described in such Current Report. We are filing this Current Report on Form 8-K/A to provide the financial information required by Item 9.01 of Form 8-K.

After reasonable inquiry, we are not aware of any material factors relating Lofton Place Apartments that would cause the reported revenues and certain operating expenses relating to it not to be necessarily indicative of future operating results.

(a) Financial Statements of Real Estate Property Acquired.

The following financial statements are submitted at the end of this Current Report on Form 8-K/A and are filed herewith and incorporated herein by reference.

Lofton Place Apartments

(b) Unaudited Pro Forma Financial Information.

The following financial information is submitted at the end of this Current Report on Form 8-K/A and is furnished herewith and incorporated herein by reference.

Paladin Realty Income Properties, Inc. and Subsidiaries

(d) Exhibits.

None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of

Paladin Realty Income Properties, Inc.

We have audited the accompanying Statement of Revenues and Certain Operating Expenses of Lofton Place Apartments, a property located at 5412 Deerbrook Creek Circle, Tampa, Florida (the “Property”) for the year ended December 31, 2008 (the “Historical Summary”). This Historical Summary is the responsibility of the Property’s management. Our responsibility is to express an opinion on the Historical Summary based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Property’s revenues and operating expenses.

In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain operating expenses of the Property for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Imowitz Koenig & Co., LLP

New York, New York

December 3, 2009

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Lofton Place Apartments

Statement of Revenues and Certain Operating Expenses

For the Year Ended December 31, 2008

See accompanying notes to the statement of revenues

and certain operating expenses.

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Lofton Place Apartments

Notes to the Statement of Revenues and Certain Operating Expenses

For the Year Ended December 31, 2008

(1) Organization

Lofton Place Apartments is an existing 280 unit multifamily community property (the “Property”) which was built in 1988 and is located at 5412 Deerbrook Creek Circle, Tampa, Florida. On October 1, 2009, an affiliate of Paladin Realty Income Properties, Inc. (“Paladin”), PRIP Lofton, LLC (“PRIP Lofton”), entered into a joint venture with NVR Lofton Place, LP (“NVR”) and BH Lofton, LLC (“BH”). PRIP Lofton owns a 60.0% interest and NVR and BH own the remaining 34% and 6%, respectively. On, October 1, 2009 Evergreen at Lofton Place, LLC (“Evergreen at Lofton Place”) acquired Lofton Place Apartments.

(2) Basis of Presentation

The Statement of Revenues and Certain Operating Expenses (the “Historical Summary”) has been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to real estate operations to be included with filings with the SEC. The Historical Summary includes revenues and certain operating expenses of the Property, exclusive of interest income, interest expense, depreciation and amortization, and non-recurring items which may not be comparable to the corresponding amounts reflected in the future operations of the Property. The Historical Summary also presents revenues and certain operating expenses of the Property allocable to PRIP Lofton’s 60.0% ownership interest.

(3) Principles of Reporting and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Property’s 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.

(4) Significant Accounting Policies

a) Revenue Recognition

The Property’s lease agreements are operating leases. Rental income is recognized in accordance with the terms of each lease. Other revenue consists of various tenant related charges and are recognized as revenue in the period in which the applicable charge is incurred.

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Lofton Place Apartments

Notes to the Statement of Revenues and Certain Operating Expenses—(Continued)

For the Year Ended December 31, 2008

b) Accounts Receivable

Bad debts are recorded under the specific identification method, whereby, uncollectible receivables are directly written off when identified.

c) Repairs and Maintenance

Expenditures for repairs and maintenance are expensed as incurred.

(5) Mortgage Loan

In connection with the closing of the Lofton Place Apartments acquisition, Evergreen at Lofton Place obtained a loan with CW Capital, LLC in the amount of $12,000,000, as evidenced by a Multifamily Note dated October 1, 2009 (the “Multifamily Note”). The Multifamily Note was assigned to Freddie Mac pursuant to an Assignment of Multifamily Note, dated October 1, 2009. The loan bears interest at a fixed rate of 5.66% and matures on October 1, 2019. Except if the loan is assigned to a REMIC, the loan is generally prepayable subject to a prepayment premium based on the remaining amount of the loan and then-current interest rates. The loan is secured by a mortgage on the Property pursuant to a Multifamily Mortgage, Assignment of Rents and Security Agreement, effective as of October 1, 2009 (the “Security Instrument”). The Security Instrument was assigned to Freddie Mac pursuant to an Assignment of Security Instrument, dated October 1, 2009. In addition, the loan is guaranteed by Charles M. Thompson, but only upon the occurrence of certain limited events (the “Guaranty Agreement”). The Guaranty Agreement was assigned to Freddie Mac pursuant to a Freddie Mac Omnibus Assignment-CME, dated October 1, 2009. Charles M. Thompson is one of the owners of NVR.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of

Paladin Realty Income Properties, Inc.

We have reviewed the accompanying Statement of Revenues and Certain Operating Expenses of Lofton Place Apartments, a property located at 5412 Deerbrook Creek Circle, Tampa, Florida (the “Property”) for the nine months ended September 30, 2009 (the “Historical Summary”). This Historical Summary is the responsibility of the Property’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of the interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Property’s revenues and operating expenses.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim Historical Summary for it to be in conformity with accounting principles generally accepted in the United States of America.

/s/ Imowitz Koenig & Co., LLP

New York, New York

December 3, 2009

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Lofton Place Apartments

Statement of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2009

See accompanying notes to the statement of revenues

and certain operating expenses.

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Lofton Place Apartments

Notes to the Statement of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2009

(1) Organization

Lofton Place Apartments is an existing 280 unit multifamily community property (the “Property”) which was built in 1988 and is located at 5412 Deerbrook Creek Circle, Tampa, Florida. On October 1, 2009, an affiliate of Paladin Realty Income Properties, Inc. (“Paladin”), PRIP Lofton, LLC (“PRIP Lofton”), entered into a joint venture with NVR Lofton Place, LP (“NVR”) and BH Lofton, LLC (“BH”). PRIP Lofton owns a 60.0% interest and NVR and BH own the remaining 34% and 6%, respectively. On, October 1, 2009 Evergreen at Lofton Place, LLC (“Evergreen at Lofton Place”) acquired Lofton Place Apartments.

(2) Basis of Presentation

The Statement of Revenues and Certain Operating Expenses (the “Historical Summary”) has been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to real estate operations to be included with filings with the SEC. The Historical Summary includes revenues and certain operating expenses of the Property, exclusive of interest income, interest expense, depreciation and amortization, and non-recurring items which may not be comparable to the corresponding amounts reflected in the future operations of the Property. The Historical Summary also presents revenues and certain operating expenses of the Property allocable to PRIP Lofton’s 60.0% ownership interest.

(3) Principles of Reporting and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Property’s 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.

(4) Significant Accounting Policies

d) Revenue Recognition

The Property’s lease agreements are operating leases. Rental income is recognized in accordance with the terms of each lease. Other revenue consists of various tenant related charges and are recognized as revenue in the period in which the applicable charge is incurred.

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Lofton Place Apartments

Notes to the Statement of Revenues and Certain Operating Expenses—(Continued)

For the Nine Months Ended September 30, 2009

e) Accounts Receivable

Bad debts are recorded under the specific identification method, whereby, uncollectible receivables are directly written off when identified.

f) Repairs and Maintenance

Expenditures for repairs and maintenance are expensed as incurred.

(5) Mortgage Loan

In connection with the closing of the Lofton Place Apartments acquisition, Evergreen at Lofton Place obtained a loan with CW Capital, LLC in the amount of $12,000,000, as evidenced by a Multifamily Note dated October 1, 2009 (the “Multifamily Note”). The Multifamily Note was assigned to Freddie Mac pursuant to an Assignment of Multifamily Note, dated October 1, 2009. The loan bears interest at a fixed rate of 5.66% and matures on October 1, 2019. Except if the loan is assigned to a REMIC, the loan is generally prepayable subject to a prepayment premium based on the remaining amount of the loan and then-current interest rates. The loan is secured by a mortgage on the Property pursuant to a Multifamily Mortgage, Assignment of Rents and Security Agreement, effective as of October 1, 2009 (the “Security Instrument”). The Security Instrument was assigned to Freddie Mac pursuant to an Assignment of Security Instrument, dated October 1, 2009. In addition, the loan is guaranteed by Charles M. Thompson, but only upon the occurrence of certain limited events (the “Guaranty Agreement”). The Guaranty Agreement was assigned to Freddie Mac pursuant to a Freddie Mac Omnibus Assignment-CME, dated October 1, 2009. Charles M. Thompson is one of the owners of NVR.

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PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES

SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS

This pro forma information should be read in conjunction with the consolidated financial statements and notes of Paladin Realty Income Properties, Inc. (“Paladin REIT”) included in Paladin REIT’s Form 10-K for the fiscal year ended December 31, 2008 and Paladin REIT’s Form 10-Q for the quarterly period ended September 30, 2009, as filed with the Securities and Exchange Commission.

The following unaudited pro forma consolidated balance sheet as of September 30, 2009 has been prepared to give effect to the acquisition by Evergreen at Lofton Place, LLC (“Evergreen”), a single-purpose limited liability company in which Paladin REIT holds a 60.0% membership interest, of Lofton Place Apartments located at 5412 Deerbrook Creek Circle, Tampa, Florida 33624 (“Lofton Place”) (the “Lofton Place Acquisition”) as if the Lofton Place Acquisition occurred on September 30, 2009. The actual acquisition of Lofton Place occurred on October 1, 2009. Paladin Realty Income Properties, L.P. (“Paladin OP”) is a Delaware limited partnership that was organized to own and operate properties on behalf of Paladin REIT and is a consolidated subsidiary of Paladin REIT. The 60.0% membership interest in Evergreen is held by PRIP Lofton, LLC, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP.

The following unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2009 has been prepared to give effect to the Lofton Place Acquisition, as if the Lofton Place Acquisition had occurred on January 1, 2008. The actual acquisition of Lofton Place occurred on October 1, 2009.

The following unaudited pro forma consolidated statement of operations for the year ended December 31, 2008 has been prepared to give effect to (1) the acquisition by KC Retreat Associates, LLC (“KC Retreat”), a single-purpose limited liability company in which Paladin REIT holds a 97.5% membership interest, of the Retreat of Shawnee located at 11128 West 76^th Terrace, Shawnee, Kansas (“Retreat Apartments”) (the “Retreat Acquisition”), (2) the acquisition of a 49% membership interest in Park Hill Partners I, LLC (“Park Hill”), a single-purpose limited liability company that owns Hilltop Apartments at 8601 Newton Avenue in Kansas City, Missouri, (“Hilltop”) (the “Hilltop Acquisition”), (3) the acquisition of a 42.5% membership interest in FPA/PRIP Conifer, LLC, a single-purpose limited liability company that owns Conifer Crossing at 3383 Holcomb Bridge Road NW, Norcross, Georgia (“Conifer Crossing”) (the “Conifer Crossing Acquisition”), (4) the acquisition of a 47.65% membership interest in FPA/PRIP Governor Park, LLC (“FPA/PRIP Governor Park”), a single-purpose limited liability company that owns Two and Five Governor Park at 6310 Greenwich Drive, San Diego, California 92122 and 5060 Shoreham Place, San Diego, California 92122 (“Two and Five Governor Park”) (the “Two and Five Governor Park Acquisition”) and (5) the Lofton Place Acquisition (collectively the “Acquisitions”) as if the Acquisitions occurred on January 1, 2008. The actual acquisition of Retreat Apartments occurred on January 14, 2008, the actual acquisition of Hilltop occurred on April 7, 2008, the actual acquisition of Conifer Crossing occurred on August 5, 2008, the actual acquisition of Two and Five Governor Park occurred on December 19, 2008 and the actual acquisition of Lofton Place occurred on October 1, 2009. The 97.5% membership interest in KC Retreat is held by PRIP 11128, LLC, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP. The 49% membership interest in Park Hill is held by PRIP 6700, LLC, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP. The 42.5% membership interest in FPA/PRIP Conifer is held by PRIP 3383, LLC, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP. The 47.65% membership interest in FPA/PRIP Governor Park is held by PRIP 5060/6310, LLC, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP.

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These unaudited pro forma financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the Acquisitions been consummated as of the dates indicated. In addition, the pro forma balance sheet includes pro forma allocations of the purchase price based upon preliminary estimates of the fair market value of the assets and liabilities acquired in connection with the Acquisitions. These allocations may be adjusted in the future upon finalization of these preliminary estimates.

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PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2009

(UNAUDITED)

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PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

(UNAUDITED)

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PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2008

(UNAUDITED)

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