Selling real estate is a great way to start in the business, but it’s not the only side of it. Real estate investments build capital even when you’re not working, and many agents use both sides of real estate with the goal of becoming independently wealthy.

Mike McCann from the Mike McCann Team in Philadelphia began his career as a real estate agent in 1986. Based in Center City Philadelphia, he handles residential homes, condominiums, developments and investment properties.

McCann started dealing with investment properties in 1988 because he knew it was the best way to build wealth. This is a philosophy he instills into his team as well, encouraging new employees to focus on selling homes for about the first year and then also investing in real estate. The key is to wait to build up money (McCann advises his employees to wait a year) before going into investing.

Typically, McCann buys one or two investment properties a year with a goal of 50 homes paid off by the time he turns 50 years old. He obtains 15-year mortgages for each of his homes with the rent about $100 to $200 more than the monthly house payments — just enough to cover the debt. That’s a $60,000 profit every year with 50 rental properties, assuming none of them are paid off.

Fixing up a house to sell for profit, or flipping, can be beneficial under the best circumstances. If successful, you can build fast capital. If unsuccessful, you may end up losing money and wasting time. McCann suggests flipping houses during a market upturn for best results.

No matter the type of real estate investing, it’s important to buy properties in areas where the market will go up. Either way, McCann suggests only selling the property in an upturn, or when you could make a profit off of it. He often makes 300 percent to 400 percent more than he originally spent on his properties.

Chris Haddon is an entrepreneur based in Washington, D.C., a partner at Hard Money Bankers and a co-founder of REI360.net.

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