You never know what the lending environment will look like at that time and that might be a problem.  

And what is the best source to get lease agreement forms and other necessary forms compliant with state/county laws and regulations? 

That way you don't lose TONS of money with:Hard money WILL have regulations on credit and incomeYou will have to get an appraisalYou will have to show experience with previous investment properties (My area requires 4 deals)You WILL owe that balance at the end of the term (If not you will get buried in extension fees) POINTS!

There are also a ton of investors in the community that are always looking to help, even in a cut throat environment.

As per commercial non consumer purpose loans, it would depend on the language of the specific state's laws, rules and regulations regarding loans, contracts, torts, etc., whether or not it is considered predatory lending or if lender liability can be invoked on some other issue.The real issue for me is that even if it passes muster in a particular state, what happens if the borrower files bankruptcy and does so utilizing Federal guidelines.  

Yet, on the same token, since there isn't any guidance from the FTB, you may be able to convince an FTB agent that your structure is within the bounds of the regulations.  

As part of the application, there needs to be an entire "narrative" about my intentions with the property, addressing dozens of regulations and other points of interest, site drawings, signs on the property, and even attending a public hearing about my proposal.

AirBnB is also a great idea, although it makes me a little nervous as a long term business model because you never know what your local city or county will do in the future as far as regulating them. 

The private investment space for non-accredited investors is traditionally governed through Regulation D as Ryan suggested, more specifically a 506b(b) private placement offering. 

Contact the local government and find out the rules and regulations for short term/ vacation rentals.