How to handle this sale?

[Scott Nipp]

I have an odd situation where we want to sell our old primary residence to a very good friend.  This is to help everyone involved but there is the caveat about business dealings with friends or family...

Our old house still has about $165k left on the mortgage and it's ARV is around $195k. We recently upgraded to a larger house as we simply outgrew the old house and really needed more space. We have a friend who we have an extremely high degree of trust in, in fact they may end up being named as getting custody of our children if something were to happen to both of us, serious trust here. However, they have crap credit do to a variety of reasons but now that he is getting back to work from a period of unemployment, he is an oil field foreman, they are ready to buy a house.

Our friend actually wants to purchase our old house and pay it off in literally 3-5 years.  When he is working he makes literally $250k+ so this is not some unrealistic goal.  Obviously the concern is the economy and oil prices to keep him employed at this level but I digress.  

My thought is to go the contract for deed route. I believe that with this option everything would stay in our name so we would avoid the DOS issue. Obviously this involves a great deal of trust on both parties but this is in ample supply as I mentioned above. Does the CFD protect us from the DOS issue? Is there a better option for getting them into our old house? Aside from doing business with friends/family and the trust issue what else might I be missing here?

In the event that this makes a difference...  We live in Texas.

Thanks in advance for any/all feedback on this issue.