Homeless construction painter plumber clothes, like usual.Bring a little flashlight and $4 receptacle tester and be ready to get into attics and crawls. 

Are you referring to the VA's program for homeless vets?

People who are staying in a house that's going to be foreclosed or sold at auction have either:1.) accepted it & don't care (probably don't have enough equity to get another place to live so they'll be homeless) 2.) have some type of delusion that the property actually won't be foreclosed on & they will somehow someway get the money to stop the sale. 3.) have an extreme emotional attachment to the house.

The houses are on a dead end street with an alley behind them, and there was a pretty sizable homeless camp set up back there, mostly because there were some empty lots owned by the city and not much traffic.

However, I don't want to end up homeless, or worse, land myself in jail because I didn't cross a t or dot an i.

If I understand correctly your goal is to get your financial situation stabilized and create passive income from the renting the property that you live in and not cause your sister to be homeless.

What solutions have you seen for housing the homeless and getting them back on solid ground (those that WANT to be able to get jobs, rebuild lives, etc.?

Are you so broke that homeless people offer you change?

For example: -evidence of increased inventory -foreclosures close to the subject property -third party material referencing a suffering local economy -information regarding increased crime/homelessness in the area.

Mostly indigent, a step above homelessness.