Ultimately, you may need to have some serious work done, but you can shop around for someone who is rated well on angieslist or other resources.

Threatening to tow their vehicle for not paying their parking space rent will likely get you a few places higher on that priority list, which is the ultimate goal - compliance with the lease.

Is there a way I can flip this property without putting down an earnest money deposit or any of my own cash, (which I have none) to my end buyer and ultimately make a profit.

I'm still waiting back for proposals and estimates based on my specs, so I'll keep you updated on who I ultimately choose and who is responsive. 

This is ultimately something you should discuss with  your lender, as each is different.

But if the tenant doesn't pay the water bill, the owner will ultimately be responsible for it.

Ultimately it will come down to the office and what policy/guidelines they aim for.

Should I mention upfront to the owner that ultimately I'm interested in buying the duplex?

@Achi Adamit, if you had the intent to hold that lot while deciding how to ultimately handle it and didn't do something like have it listed for sale the entire time you should be able to do a 1031.  

If so ultimately it will come down to what your lease says.