FOURTH AMENDED AND RESTATED ADVISORY AGREEMENT

EXHIBIT 10.1

FOURTH AMENDED AND RESTATED ADVISORY AGREEMENT

THIS FOURTH AMENDED AND RESTATED ADVISORY AGREEMENT (this “ Agreement ”), dated as of July 28, 2009, is entered into between Paladin Realty Income Properties, Inc., a Maryland corporation (the “ Company ”), Paladin Realty Income Properties, L.P. (the “ Operating Partnership ,” and collectively with the Company, the “ Fund ”), and Paladin Realty Advisors, LLC, a Delaware limited liability company (the “ Advisor ”).

W I T N E S S E T H:

WHEREAS , the Company’s initial public offering of shares of its common stock, par value $.01 per share (the “ Shares ”) was declared effective February 23, 2005 (the “ Initial Offering ”) and expired on July 28, 2008;

WHEREAS , the Company’s follow-on offering of Shares, allocated between a primary offering (the “ Primary Offering ”) and a distribution reinvestment plan, was declared effective July 28, 2008 (the “ Follow-On Offering ”) pursuant to a prospectus contained in a registration statement for a follow-on offering (the “ Follow-On Registration Statement ”);

WHEREAS , the Company has qualified as a REIT (as defined below) and invests, through the Operating Partnership, its funds in investments permitted by the terms of the Articles (as defined below) and Sections 856 through 860 of the Code (as defined below);

WHEREAS , the Fund desires to avail itself of the experience, sources of information, advice and assistance of, and certain facilities available to, the Advisor and to have the Advisor undertake the duties and responsibilities set forth herein on behalf of the Fund, subject to the supervision of the Board of Directors of the Company and the general partner of the Operating Partnership;

WHEREAS , the Fund, by action of the Company’s Board of Directors, has determined that, consistent with the Fund’s investment objectives and policies, its primary investment focus shall be investing in Core and Core-Plus Properties located in the United States; and

WHEREAS , the Advisor is willing to undertake to render such services, subject to the supervision of the Board of Directors and the general partner of the Operating Partnership, on the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms have the definitions hereinafter indicated:

“ Acquisition Expenses ” means any and all expenses incurred by the Company, the Advisor, the Operating Partnership, or any Affiliate thereof in connection with the selection or acquisition of any Investment, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance premiums, and other closing and miscellaneous expenses related to selection and acquisition of Investments, whether or not acquired.

“ Acquisition Fee ” means any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including the Paladin Acquisition Fee (as defined in Section 9(a)) and any other fees or commissions paid by or to any Affiliate of the Fund or the Advisor) in connection with the making or investing in mortgage loans or the purchase, development or construction of any property or other Investment, including, without limitation, real estate commissions, Development Fees and Construction Fees (except as provided in the following sentence), selection fees, nonrecurring management fees, loan fees, points, or any other fees or commissions of a similar nature. Excluded shall be all Development Fees or Construction Fees paid to any Person or entity not affiliated with the Sponsor or Advisor in connection with the actual development and construction of any property or other Investment.

“ Advisor ” means Paladin Realty Advisors, LLC, a Delaware corporation, any successor advisor to the Company, or any person or entity to which Paladin Realty Advisors, LLC or any successor advisor subcontracts substantially all of its functions.

“ Affiliate ” means, (A) any Person directly or indirectly owning, controlling, or holding, with power to vote, 10% or more of the outstanding voting securities of such other Person, (B) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with the power to vote, by such other Person, (C) any Person, directly or indirectly, controlling, controlled by, or under common control with such other Person, (D) any executive officer, director, trustee, general partner or manager of such other person, or (E) any legal entity for which such Person acts as an executive officer, director, trustee, general partner or manager.

“ Appraised Value ” means value according to an appraisal made by an Independent Expert.

“ Articles ” means the Articles of Amendment and Restatement of the Company dated as of February 25, 2005, which comprise the articles of incorporation of the Company, as amended from time to time.

“ Asset Management Fee ” means the fee described in Section 9(c) hereof.

“ Average Invested Assets ” means, for a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in equity interests in and loans secured by real estate, before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period.

“ Board ” means the Board of Directors of the Company.

“ Cause ” means (i) any fraud, criminal conduct, willful misconduct or willful breach of fiduciary duty by the Advisor, (ii) any material breach of this Agreement by the Advisor not cured by the Advisor within fifteen (15) days of the Advisor’s receipt of notice of such breach from the Fund, or (iii) the bankruptcy of the Advisor.

“ Claims ” shall have the meaning ascribed to it in Section 16(a) hereof.

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“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

“ Company ” means Paladin Realty Income Properties, Inc., a corporation organized under the laws of the State of Maryland.

“ Competitive Real Estate Commission ” means a real estate or brokerage commission paid for the purchase or sale of property which is reasonable, customary, and competitive in light of the size, type, and location of the Investment.

“ Construction Fee ” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitation for an Investment.

“ Control ” means, with respect to a Person, the possession (directly or indirectly) of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“ Core and Core-Plus Properties ” generally reflect a continuum of risk and expected return as among “core”, “core-plus”, “value-added” and “opportunistic” investments. A “core” property generally is the least risky, with the lowest expected returns, e.g., a fully leased building with a stable, predictable income stream that represents a significant percentage of total return over the expected holding period. “Core-plus” differs from “core” in that the properties, although substantially leased with current income, may exhibit more lease turnover risk and/or require some type of modest enhancement or value-added element to turn them into “core” properties with stabilized income streams. In contrast, “value-added” properties require a significant improvement, such as re-leasing, re-positioning, or re-development before they can be stabilized and then sold, and as a result, appreciation is a much greater component of total return than current income and “opportunistic” investing is high risk, and encompasses attributes such as non-traditional property types, ground-up development, substantial vacancies and high leverage, with little to no current income return.

“ Dealer Manager ” means Prospect Financial Advisors, LLC and Paladin Realty Securities, LLC (f/k/a BroadWall Capital LLC) or such other Person or entity selected by the Board of Directors to act as the dealer manager for the offering of the Shares. Prospect Financial Advisors, LLC and Paladin Realty Securities, LLC are members of the Financial Industry Regulatory Authority.

“ Dealer Manager Fee ” means any dealer manager fee paid to the Dealer Manager pursuant to (i) that certain Dealer Manager Agreement, dated February 28, 2005, among the Company, the Operating Partnership and Prospect Financial Advisors, LLC, (ii) that certain Dealer Manager Agreement dated June 5, 2007, among the Company, the Operating Partnership, Paladin Realty Advisors, LLC and BroadWall Capital LLC, (iii) that certain Dealer Manager Agreement dated February 6, 2008, among the Company, the Operating Partnership, Paladin Realty Advisors, LLC and Paladin Realty Securities, LLC, or (iv) any similar fee paid to any other Dealer Manager in connection with a sale of the Shares.

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“ Development Fee ” means a fee for the packaging of an Investment, including the negotiation and approval of plans, and any undertaking to assist in obtaining zoning and necessary variances and financing for a specific property, either initially or at a later date.

“ Director ” means a member of the Board of Directors of the Company.

“ Dividends ” means any dividends or other distributions of money or other property by the Company to the Stockholders, including distributions that may constitute a return of capital for federal income tax purposes.

“ 8% Return ” means, with respect to the Stockholders, an amount calculated like simple interest at the rate of eight percent (8%) per annum calculated on the varying daily balances of Invested Capital during the period to which the 8% Return relates, and determined on the basis of a 360-day year/30-day month, cumulative and non-compounded for the period for which such 8% Return is being determined.

“ Follow-On Offering ” means the public offering of Shares pursuant to a Prospectus contained in the Follow-On Registration Statement filed with the SEC.

“ Follow-On Registration Statement ” means the registration statement on Form S-11 for the Follow-On Offering.

“ Fund ” means the Company and the Operating Partnership, collectively.

“ Good Reason ” means (i) any failure by the Company or the Operating Partnership to obtain a satisfactory agreement from a successor entity to the Company or the Operating Partnership to assume and agree to perform the Fund’s obligations under this Agreement, or (ii) any material breach of this Agreement by the Fund not cured by the Fund within fifteen (15) days of the Fund’s receipt of notice of such breach from the Advisor.

“ Gross Proceeds ” means the aggregate purchase price of all Shares sold for the account of the Company, without deduction for Selling Commissions, volume discounts, marketing support fees, due diligence expense reimbursement, fees paid to the Dealer Manager or other Organization and Offering Expenses. For the purposes of computing Gross Proceeds, the purchase price of any Share for which Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the offering price per Share.

“ Indemnitee ” shall have the meaning ascribed to it in Section 16(a) hereof.

“ Independent Director ” means a Director who is not, and within the last two years has not been, directly or indirectly associated with the Advisor or Sponsor by virtue of (i) ownership of an interest in the Advisor, the Sponsor or any of their Affiliates, (ii) employment by the Advisor, the Sponsor or any of their Affiliates, (iii) service as an officer, trust manager or director of the Advisor, the Sponsor or any of their Affiliates, (iv) performance of services, other than as a Director, for the Company, (v) service as a director, trust manager or trustee of more than three real estate investment trusts advised by the Advisor or organized by the Sponsor, or (vi) maintenance of a material business or professional relationship with the Advisor, the Sponsor or any of their Affiliates. A business or professional relationship is considered material if the gross revenue derived by the Director from the Advisor or Sponsor and their Affiliates exceeds five percent (5%) of either the Director’s annual gross revenue, derived from all sources,

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during either of the last two years or the Director’s net worth on a fair market value basis. An indirect relationship shall include circumstances in which a Director’s spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the Advisor or Sponsor or any of their Affiliates or the Company.

“ Independent Expert ” means a Person or entity with no material current or prior business or personal relationship with the Advisor or any of the Directors that is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Company.

“ Initial Offering ” means the offering of Shares pursuant to that certain registration statement declared effective February 23, 2005.

“ Invested Capital ” means, with respect to the Stockholders, as of any relevant date, an amount equal to the excess of (i) the aggregate amount of cash contributed or deemed contributed by the Company to the Operating Partnership from the gross proceeds of the issuance by the Company of Shares to the Stockholders, over (ii) the sum of (A) the cumulative distributions of Net Sales Proceeds (as defined in the OP Partnership Agreement) made to the Company pursuant to Section 5.1(c) of the OP Partnership Agreement as of such date and distributed to the Stockholders, and (B) the cumulative amounts paid to the Stockholders to repurchase Shares under the Company’s share redemption plan as of such date.

“ Investment ” means any Real Property Investment or any Real Estate Related Investment.

“ Listing ” means the listing of Shares on a national securities exchange.

“ Listing Date ” means the date on which a Listing occurs.

“ NASAA Guidelines ” shall have the meaning ascribed to it in Section 16(a) hereof.

“ Net Income ” means for any period, the total revenues of the Fund applicable to such period, less the total expenses of the Fund applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, that Net Income for purposes of calculating total allowable Operating Expenses under Section 11 hereof shall exclude the gain from the sale of the Fund’s assets.

“ Offering ” means any public offering of Shares pursuant to a Prospectus that is registered with the SEC, including the Initial Offering and the Follow-On Offering.

“ Operating Expenses ” means, for purposes of Section 11 hereof, all costs and expenses incurred by the Fund, the Advisor or any of their respective Affiliates, as determined under generally accepted accounting principles, which in any way are related to the operation of the Fund or to the Fund’s business, including advisory fees, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees payable to the Advisor, including the Subordinated Disposition Fee described in Section 9(d) hereof, (vi) the subordinated distribution of net sales proceeds, the subordinated distribution upon listing and the subordinated

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distribution upon termination to be received by the Advisor described in Section 9(e) hereof, (vii) Acquisition Fees, Origination Fees and Acquisition Expenses, and (viii) real estate commissions on the resale of property and other expenses connected with the acquisition, disposition and ownership of real estate interests, mortgage loans, or other property (such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of property).

“ Operating Partnership ” means Paladin Realty Income Properties, L.P., a Delaware limited partnership, and any successor thereof.

“ OP Partnership Agreement ” means the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as the same may be amended from time to time.

“ Organization and Offering Expenses ” means any and all costs and expenses, other than Selling Commissions and any Dealer Manager Fee, incurred by the Advisor or any of its Affiliates, including the Sponsor, in connection with the formation, qualification and registration of the Company and the Operating Partnership and the marketing and distribution of the Shares, including, without limitation, the following: legal, accounting, underwriting, brokerage, listing, registration and escrow fees and expenses; printing, amending, supplementing, mailing and distributing costs; filing, registration, Listing and qualification fees and taxes; telegraph and telephone costs; and all advertising and marketing expenses, including any payment or reimbursements to the Dealer Manager or other broker-dealers of expenses associated with the Offering and all other costs related to investor and broker-dealer sales meetings.

“ Origination Fee ” means the origination fee described in Section 9(b) hereof.

“ Paladin Acquisition Fee ” means the acquisition fee described in Section 9(a) hereof.

“ Person ” means an individual, corporation, partnership, limited partnership, limited liability company, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d) (3) of the Securities Exchange Act of 1934, as amended.

“ Primary Offering ” means all Shares offering in the Initial Offering with the exception of Shares offered pursuant to the Company’s distribution reinvestment plan.

“ Prospectus ” has the meaning set forth in Section 2(10) of the Securities Act of 1933, as amended (the “ Securities Act ”), including a preliminary Prospectus, an offering circular as described in Rule 253 and a combined prospectus as described in Rule 429 of the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling securities to the public.

“ Purchase Price ” means the amount actually paid for an Investment or allocated to the purchase, development, construction or improvement of a property, inclusive of expenses related thereto and the amount of debt associated with such property, but exclusive of Acquisition Fees and Acquisition Expenses.

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“ Real Estate Related Investments ” means (a) the issuance of loans, such as first mortgage and mezzanine loans on real property; (b) investments in equity securities such as common stocks, preferred stocks and convertible securities of public or private real estate companies; and (c) investments in debt securities such as collateralized mortgage backed securities, commercial mortgages and other debt securities.

“ Real Property Investment ” means any investment in unimproved and improved real property, (including, without limitation, fee or leasehold interests, options and leases), either directly or through a joint venture.

“ REIT ” means a “real estate investment trust” as defined in Section 856 of the Code and applicable Treasury Regulations.

“ Remaining Capital ” means, with respect to the Stockholders, as of any relevant date, an amount equal to the excess of (i) the aggregate amount of cash contributed or deemed contributed by the Company to the Operating Partnership from the gross proceeds of the issuance by the Company of Shares to the Stockholders, over (ii) the cumulative amounts paid to the Stockholders to repurchase Shares under the Company’s share redemption plan as of such date.

“ Sale ” means, with respect to any Investment, any transaction or series of transactions whereby:

(a) the Fund directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of any Investment, including, without limitation, any event with respect to any Investment that gives rise to a significant amount of insurance proceeds or condemnation awards; or

(b) any joint venture directly or indirectly sells, grants, transfers, conveys, or relinquishes its ownership of any Investment, including any event with respect to any real property which gives rise to insurance proceeds or condemnation awards.

“ SEC ” means the Securities and Exchange Commission.

“ Securities ” means the Shares or any other stock or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

“ Selling Commissions ” means any and all commissions payable to underwriters, dealer managers, or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to the Dealer Manager.

“ Senior Living Assets ” means any Investment involving the housing or care of residents or users age 55 and older, including without limitation, active adult or independent living facilities, continuing care retirement communities, and assisted living and skilled nursing facilities.

“ Shares ” means the shares of the Company’s common stock, par value $.01 per share.

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“ Sponsor ” means any Person directly or indirectly instrumental in organizing, wholly or in part, the Company or any Person who will control, manage or participate in the management of the Company, and any Affiliate of such Person. Not included is any Person whose only relationship with the Company is that of an independent property manager of Company assets, and whose only compensation is as such. Sponsor does not include wholly independent third parties such as attorneys, accountants, and underwriters whose only compensation is for professional services. A Person may also be deemed a Sponsor of the Company by:

(i) taking the initiative, directly or indirectly, in founding or organizing the business or enterprise of the Company, either alone or in conjunction with one or more other Persons;

(ii) receiving a material participation in the Company in connection with the founding or organizing of the business of the Company, in consideration of services or property, or both services and property;

(iii) having a substantial number of relationships and contacts with the Company;

(iv) possessing significant rights to control Company properties;

(v) receiving fees for providing services to the Company which are paid on a basis that is not customary in the Company’s industry; or

(vi) providing goods or services to the Company on a basis which was not negotiated at arms length with the Company.

“ Stockholders ” means the holders of record of Shares maintained in the Company’s books and records.

“ Subordinated Disposition Fee ” means the fee described in Section 9(d) hereof.

“ Termination Date ” means the date of termination of this Agreement pursuant to Section 15 hereof.

2. Appointment . The Fund hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

3. Duties of the Advisor .

The Advisor shall undertake to source and recommend to the Fund opportunities to make Investments and to provide a continuing and suitable investment program consistent with the investment objectives and policies of the Fund as determined and adopted from time to time by the Board and in accordance with this Agreement (including, without limitation, Section 4 hereof). In performance of this undertaking, subject to the supervision of the Board and consistent with the provisions of the Company’s Prospectus for the Follow-On Offering (and any supplements thereto), the Articles, the Bylaws of the Company and the OP Partnership Agreement, the Advisor shall, either directly or by engaging an Affiliate:

a. serve as the Fund’s investment advisor;

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b. perform and supervise the various administrative functions reasonably necessary for the daily management of the Fund;

c. maintain and preserve the books and records of the Company and the Operating Partnership;

d. investigate, select, engage and conduct business with, on behalf of the Fund, such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to appraisers, consultants, accountants, contractors, leasing agents, correspondents, lenders, technical advisors, attorneys, real estate brokers, broker-dealers, underwriters, corporate fiduciaries, escrow agents, transfer agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property managers, mortgagors, mortgage brokers, real estate research firms and any and all agents for any of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the services described in this Section 3, including but not limited to entering into contracts in the name of the Company or the Operating Partnership with any of the foregoing;

e. consult with the officers of the Company and the Board and assist the Board in the formulation and implementation of the Company’s financial and investment policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Fund and in connection with any borrowings proposed to be undertaken by the Fund;

f. (i) source potential Investments and analyze and recommend potential Investments for the Fund in compliance with the investment objectives and policies of the Fund and