Are there reasons why I should not allow my tenant to proceed with this project?

See if anyone else is doing Air BNB and what they're charging, so you are dealing with reality when making your projections.

For project management we use Basecamp.

After I complete this project I plan to purchase next in Columbia, Missouri to diversity to a little larger market not too far from home. 

The architect/contractor can help you budget and maximize your project's potential in your specific market - i.e. they can help answer your question on what type of property is best - new home, modular, small lot, etc.

do they have any referrals or a book of past projects that have similar performance?

If they are floating, the may go up each year which will impact your cash flow.Your best bet is to secure a loan with a term length that is longer than your projected hold period.

Make sure this is in your cash flow projections.  

This is my first new construction project (I'm psyched!

Account ClosedBest of Luck in your projects.