However, many rent supply stores have them for rent and every insurance claim with odor issues (fires and water issues (mold)) includes there use in the remediation. 

His realtor claimed his relatives were paying rent - but being the inexperienced fool that I was at the time I never asked for proof of deposits or leases. 

Or is it seemingly unrealistic and risky (legally speaking)?

I'm not a lawyer, but I think you put yourself in jeopardy for your tenants to make a claim that the rent stated on the lease was not always enforced, opening yourself to legal issues.

He has been doing RE searches for 40 years and said he has never seen a deed claim like this. 

If I had $10000 for every realtor I encountered who listed a property as high as it could go (or over) and then went on to claim the price was typical or market value I could retire and retire quite nicely. 

They are usually in distress and the wholesaler gets them under contract claiming they buy houses cash.

in my area a claim is filed they send the homeowner the check, homeowner then proceeds to either fix home and stay or buy another home and leave, most of the time they pocket the money and move out leaving the home, then its up to park owner to dispose of the home 

Otherwise, my home equity is at the mercy of creditors who have a personal claim against me. 

If you were to buy any properties they have sent you without using them, they would technically be able to claim they were the procuring cause of you finding that property and potentially sue you for their commission.