Two years later my claim is still tied up in the courts 

Would it hold up in court?

Yea sometimes you have to pay for the search and don't end up buying it. 

If not, I'd appreciate any advice on how to set this up effectively.

Quote from @Jennifer Fernéz: The best method is to make an offer and require the seller to remove the tenant so you don't have to deal with it after closing.If they won't do it, then you'll have to do it after you own the property.

Something that hasn't been brought up is the no money down dreamer who is just starting out with empty pockets.

Just evict them with damages, clean it all up, and rent it out again.

The property appraised at $25,000 over purchase by comparison method and around $60k over by cost method.

Its up to you, you could challenge it, 99% of Accountants want to avoid any chance of an audit. 

By focusing on properties already set up for seller financing, they avoided the hassle of introducing and pitching the concept to sellers.