The reason this is so confusing is that 3 different forces are acting on this mess at once.
- Giving a gift to one child (and not the other)
- Lending money to one child (and not the other)
- Investing your own money for a viable return
I get where you are trying to create synergy here, but this is creating an overload. In our culture, dealings with money with relatives has an extremely corrosive effect on social relations, you could become estranged from this. Family is far more important than money.
Loaning to family creates confusion "Loan or gift?"
The problem with lending to family is that you are expected to understand if they are having trouble. Which puts you firmly on the bottom of the priority list for payback. And there's not a darned thing you can do about it! What are you going to do, sue them? Report them to credit bureaus? Absurd. The most you can possibly do is sell their mortgage to a different lender, but you'd have to do that at a discount.
The borrower knows they have you over a barrel, and you have no practical means to force them to pay. This is a recipe for family disaster.
The myth of "keeping it in the family"
This point brought to you by the word "Fungible". Let's say your brother sells BBQ sandwiches. They are very popular and he always sells out - he can get a full retail $10 for each sandwich, every time.
You are hungry for a BBQ sandwich. Your brother could give you a free sandwich, but then, he wouldn't have it to sell to a paying customer, so he'd be out $10. Therefore you agree to pay $10, but then your brother feels guilty. "Keeping it in the family", right?
But let's suppose instead, he sells the sandwich to a stranger and collects $10. Meanwhile you buy a sandwich from the other BBQ shop down the road for $10. What is the financial impact of this?
It's a wash. It does not matter which one occurs. He earns $10 either way. You pay $10 for a sandwich either way. Except that by buying at the other shop, you get competitive intelligence you didn't have before.
Similarly, it is a wash for him to get his mortgage from a stranger, and you to place your money in some other kind of investment that pays a comparable amount.
The real issue is learning to invest
I think the appeal here is that loaning to family seems like the best investment you know how to get. That is simply a matter of learning how to invest. I say "simply" because profitable investing is actually much easier than most people think.
So my recommendation here is to learn the craft of investing, and place your investments with strangers.