Assuming it's more than a few days and there aren't strings attached you should be fine. 

Whats the fine line between the two?

Small bedrooms are fine.  

@Brant Vaught   if you lease the property with the option to purchase that's fine... and then your thought is to flip the option and make the delta.. is that what your thinking of doing?

@Lisa Thoele  Its a fine line in the ultra competitive   west coast markets.When I speak at RIAs and other events in LA.. the first thing I ask is a show of hands from the audience who is a RE agent.. virtually every hand is raised.. then I ask Who is a Private lender and again nearly all the audience raises their hands.Its not quite that way here in Oregon.. but its still a very vibrant RE market..

@Matt Cramer  Without knowing the fine details I can only give you some basic input...The trailer will depreciate in value, but ideally the lot will of course appreciate, so the value I imagine is in the land. 

Like I said, the above details sound fine.

Simple green space and seasonal food vending in the heart of town would seem to be a fine plan, entirely within the zoning ordinances as they currently exist (although a restroom facility may be necessary for long term).  

I agree with Bill Gulley this time because he is right, and also I agree when folks think too much they get in trouble and look at all the bankers whom the government slap with fines for thinking without advice from a lawyer.Joe Gore

Just check in on bp when you are close so these pros can help evaluate and you will be fine.