In other words, if the tenant is weak financially, weak in experience (for this given business focus) and/or weak in both... you need to strongly consider the "what if tenant doesn't make it" scenario.  

I have 2+ years in experience with wholesale and being an acquisitions manager.

I already have a home in California, but there is no way I can get it to cashflow, chock that up to inexperience.

Due to my inexperience and a new location, I needed someone who knew the area.

House hacking is the term used on this forum.These two examples are low risk first moves that will allow you to get your feet wet, you might not make millions of dollars on them, but you also aren’t trying to flip a house in 3 months super leveraged (meaning a lot of debt), where you could lose everything if your inexperience makes you underestimate a cost, miss a zoning law that affects your success, etc. the list goes on.

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?

Every experienced investor started out getting their first loan before they had experience.You might look for a loan and find a partner to bring in to compensate for your inexperience.

If so, 90% of shops are not lending to first timers and taking on inexperience risk and market cycle risk in one go.

I am worried I will miss huge issues with the house due to inexperience that will cause a huge headache later.

All I have ever heard is how much more lucrative STR's are, is it just the inexperience/unpreparedness/unprofessionalism of these hosts?