dummie investor?

[devo]

This is for all you math wizards out there. I was a music major, so take that for what it's worth...I need your help.

I keep hearing that I'm better off in the stock market than in RE.

About 18 months ago I decided to jump into RE investing. Just a toe in really, but I bought a single family home in a market distant from my own. Being in california, I just couldn't find a way to start with a negative cash flow of 2k. I borrowed about 30k from my primary residence (still at a 50% LTV...you know how rediculous it has gotten out here). I bought a home for 150k, 2 years new. I owe about 120k on that new first. Now of course, I wasn't real smart about it. I bought it at retail...I couldn't handle the thought of chasing distressed owners. Current value is comping out around 175k. It's not in one of those explosive markets, generally been slow, methodical appreciation (got real lucky last year, I guess, but I'm not planning for that to continue). By my numbers, accounting for 10% vacancy, 10% management, and 1% annually for repairs ( I haven't actually had any yet). I'm taking a cash flow paper loss that I figure to be between 3-400/month.

Thanks for hanging in there. Here's my question. Am i wasting my time/energy/money? I do plan to hold on for the long term. If I sold, it would be to 1031 into something else. The monthly loss is money that I'd be investing anyway. Considering that a tennant is paying most of my mortgage and I'm building equity, how would this investment fare against a reasonably balanced portfolio of the same 30k and 400/month invested in the market? Even if you assume 3% market apprec. and 3% rent increases annually, either I'm not savvy enough with numbers (I'm not!), or this thing still comes out nice for me.

Again, I understand all the RE gurus..."make money on the buy". I know I didn't, but is this really a terrible deal?!?

What say you...tryan, arif... and you other re investors.

I'd appreciate the input.

devo