i think most of our judges , save a couple, would throw that out unless the tenant also wanted to exercise the clause to end the lease.

In NYC, I found out that there are four exemption categories as follows: School Tax Relief (STAR) Basic STAR, Enhanced STAR, Senior Citizen Homeowners Exemptions (SCHE), and Disabled Homeowners Exemptions (DHE). 

I don't want to tie up a property by a renter that won't be exercising the option and usually an option sets a price a seller is obliged to sell for, so if there is appreciation, the renter benefits.You need to do more research as the range of comps is too broad.

A proof of funds is as well given as assurance of buying the property after the lease period is up and if the option did not get exercised (to buy), is this something mandatory and how should be the strategy be like for a starter like me?

You are off to a great start with knowing friends that are already real estate investors and BiggerPockets can only enhance your network!

On all my other deals I have never used a bird dog, so I do not know what's appropriate. no idea what is appropriate for bird dog but for a buy and hold or any transaction really 1 to 2k.. and then take that and pay them monthly over 36 months.. and then tell them to go find 20 more.. you have the opportunity here on BP to listen to those with a lot of experience at this and I cant stress enough that minor partners are trouble.. it never works out.. and they will think it was all them and you could have never done it without them.. pay them for what they did but DO NOT put them on title or a member of your LLC.. this mistake cost me a few hundred grand over the last 30 years.. even I can learn from my booboos  but I did not have BP to ask should I have minor partners sounded good at the time.. but then they have an interest and they can then exercise that interest and usually blackmail you into more than you really owe them.. 

Usually in these cases, there is an option to buy, but in cases of the old tired landlord, it is only exercised after his death.

Capital improvements should be an expense of the land owner as part of a lease option, otherwise you risk throwing that money away if you do not exercise the option.If the Seller's big concern is taxes go with a straight Seller Financing arrangement as it will provide the same outcome. 

Making money on the buy is an old saying, but it is really making equity on the buy.My final comment "Lastly is you make money on the buy not the sell." regardless of it's age will withstand the test of time for the simple reason that purchasing properly regardless of market conditions greatly enhances your odds of having equity.

And without any enhanced encryption!