Should I file a small court claim because she owed the rent and broke the lease without a 60 day notice (written in the lease), or should I send it to a collection agency? 

Please be sure to select a Solo 401k plan provider which allows you to take a loan and will prepare the required 401k loan documents.The repayment terms are equal monthly/quarterly payments (as you prefer) of principal and interest (e.g. prime + 1%) spread over a 5 year term (or longer if you will use the loan to purchase your primary residence).There are no prepayment penalties and no restrictions on what you can do with the proceeds of the 401k loan.Please note that you are obligated to pay back their 401k (regardless of the performance of your real estate investment).As an alternative to taking the loan, you could even purchase the investment property directly using funds in your Solo 401k (assuming you select a Solo 401k plan provider which allows you to invest in real estate).

I'm proceeding on, so I'll see what it looks like in 6 months.

Proceed with caution!

I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.

With the proceeds from your sale, your salary, and the benefits of a 0% down VA loan, you may want to consider going after something bigger.

Some investors think they can have the tenant pay for a certain portion of repairs, and thats fine unless you are in court.

I'd follow up with whoever is responsible for condemning it before proceeding.

Logic doesn't always work in tax court, authoritative guidance does.  

Most of my problems come from the leases that are locked in, especially non-payment as they'll just stop paying and tell us to take them to court or send them to collections at times.