My partners have different avatars which represent the demographic they naturally appeal to and that's where they focus. 

After reading Garrett Sutton's book "Start Your Own Corporation" it seems like an LLC would be the best way to protect myself from lawsuits and situations of that nature.

You can indeed in a self-directed IRA invest in a lot of alternative investments like real estate.

This would give you the potential to diversify that savings outside of the stock market and into alternative assets such as real estate.  

Alternatively is there a possibility of your sister simply keeping the house, using a HELOC to get her equity for her next place?

I gladly do things of this nature for free for anybody who asks.

What would be an alternative solution in this scenario?

Any balances due, tenants with late payments still dueIdentify any existing evictions in progressCertificate of Occupancy from the City of LA9a Property Report Natural Hazards Disclosure Statement Copies of all current insurance policies and insurance company contact infoLoss run from the insurance carrier (my insurance broker requires this from seller)Copies of ad valorem tax statements covering the Property for the last twelve (12) months, if anyCopies of electric bills for last 12 monthsCopies of gas bills for last 12 monthsCopies of water and sewer bill for the last 12 monthsCopies of trash bills for the last 12 monthsCopies of any vendor service contracts (common ones include landscaping, interior cleaning, laundry, fire alarm monitoring, and pest control) Copies of any environmental studies affecting the property, if any.A list of anything that will not convey with property (common items include laundry machines and appliances owned by seller)Copy of current management agreementCopies of all existing surveys of the Property, if any.Copies of all warranties for appliances, equipment, utilities, roof, paving, pool, etc., if any.Copies of the last three years’ profit and loss statementsList of all capital expenditures in the last 3 yearsDate of systems updates, if known (plumbing, electric, roof, HVAC) Preliminary Title ReportCopies of the most recent title insurance policies, if any.

Most gains will go back into the same asset due to tax regulations anyway.Mr and Mrs working Joe need more pocket money "Mean Green" to spend (lower income and property taxes) not more debt, which will naturally spur the spending (because most people will live close to paycheck to paycheck even as their income increases).Just my 2 cents.

I have read a ton on it and do research and it comes natural to me and I love learning about it whenever I can.