This is not a which one has more profit question.

It all depends on the timing. If your sister-in-law buy the house first, financially not benefits you, but this is not the question. I think you have to do it for a happy family.
I think use your hu*****and and his sisters name in the title can do it (LLC will have higher interest rate). PUt your sister's name in the loan app so to qualify for primary home.