I am still new to a lot of the REI terminology and calculations, so I'm just using the amount spent on renovations as my "cash invested."

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

We would also calculate two different "worst case scenarios"...what if they don't pay and what if they do...then go with the lowest strike price as our ceiling.

Take calculated moves forward and your efforts will compound!

These typically account for about 80 to 85% of all expenses in a flip.If you know the lenders' terms and the loan duration, lender fees, the second greatest expense, are easy to calculate.

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

Do the calculations factor in default rates?

Calculate 100 ARVs and see how close you get..

@Kyle Folmar, make sure that your calculations for the amount of net equity you'll have after the sale includes allocating an amount to pay the capital gains tax and depreciation recapture.If you do meet the requirements that @Drew Sygit laid out then you would get the first $500K of profit tax free. 

I'm sure you will need tools to find deals (eg price/sqft etc), estimate rents, calculate cash-on-cash returns, cap rate etc.