I have some of the skills available and will be learning more of those skills to help "perfect" the renovations. 

We will also be looking for a lender that is familiar with the vacation rental real estate and qualifying income.

I don't think domestic disputes can qualify for "illegal activity" From the info given I don't think you have legal grounds to evict at this point.

My brother qualifies for the coveted VA loan and we've learned that he can purchase up to a 4-plex as long as he occupies one of the units for 6 months. 

It is always recommended that you seek advice from a qualified professional if you are in doubt about the laws or how they boil down to what you can and can't do with your retirement savings.

@Michael Cavitolo AWESOME saving skills.

You're right, one subaccount is tax-deferred while qualified distributions from the other are tax-free, but the immediate result of the 1099 is the same either way- no taxation. 

A better way with single family homes is to buy them and then become a "lease option" owner who does financing to good people that have not qualified with a Bank and do not know about the alternatives and they will usually take better care of the home because they think they will own some day, collect a larger non-refundable deposit, the monthly spread between your payment and the rent during that period, and then make money on the sale option.  9 times out of 10 they usually do not purchase the home but you can do it again.

You need, however, to learn how to structure these deals properly, use a qualified syndication attorney so you don't get sideways with the SEC or your state regulators, and to build a network of investors.Building the network of investors first is the critical step.  

Many work for a big name company and do smaller contract jobs in the side with their skills.