Unplanned expenses: Shoddy electrical.

I think you've got a great tenant here, and even if she is being dishonest, it's probably to protect herself a bit and squirrel away some $ into savings as a just in case.

Blimey ... also, dont escrow anything you dont have to, the banks squirrel cash away out of your pocket to protect them from you not paying ... this happens at closing and no one mentions it.

I'm always moving, but rarely chasing squirrels. 

The thing about garage rentals is depending how old the garage is you can get squirrels or mice in them so when I rent garages I tell the tenants that to set expectations. 

But if a squirrel does not store his nuts before the winter, he will starve to death.

The rest of it (40%) went to my initially unplanned upgrades of finishing the basement and putting a full bath in it.

My goal is to have 20k to invest and to be safe I want an extra 5k to have a backup in case of unplanned costs due to inexperience in the buying process, having vacancy the first months, etc...Question 1: Does it make sense to minimize my 401k contribution to nearly nothing to speed up my savings for REI?

^Outdoor cat may be substituted by stray dog, rabbit, hawk, squirrel, coyote^^ or fox^^.

Lower your DTI and 2. relieving you of financial burden as your first rental property may need you to take on unplanned financial obligation.