In your contract make sure you the contractor is liable for work that was done incorrectly and caught during inspection.

If this is incorrect I'd appreciate some feedback as well.

If done incorrectly it will trap moisture inside and hide the rot from view. 

@Dan Heuschele  a lot of info but its all incorrect , higher cash flow yes but not %  then Cleveland .

@Jim FroehlichThe person you spoke with at your brokerage who said "you can't invest directly into real estate or note" with your Solo 401k is incorrect.

Even the best answers may not be correct because we don't know the entire situation; we base our opinions on what you share with us and what you share may be incomplete, incorrect, or biased.

We also fixed some incorrect electrical work(Think burn marks behind drywall, at improper electrical junctions), and got everything back in decent order.What was the outcome?

That's ordinary income subject to self employment tax- and if that's not what your CPA has been doing, especially with 6 flips a year,  that's been being reported incorrectly.  

@Shaun FutchYou are correct in that you may have more than one VA loan at a time, but you are incorrect in your interpretation of how the entitlement works.

However, I suspect the opposing attorney wouldn't have bothered to send you a violation of automatic stay (which the court takes very seriously and could cause a problem for the opposing attorney if he filed one incorrectly) so I'd be inclined to assume you owe the money to be paid back to the estate of the debtor.