When are permits truly necessary in a BRRR?

[Matt W.]

Hello BP, 

Excuse me if this is redundant but I want to get this idea clear in my head. I am looking at a property to BRRRR. It is a SF, 3/2 @ 1500sqft, Wilmington, NC area. The property is a major rehab, already gutted to studs and floor joists. The current owner did all the gutting himself, and as far as the city/county knows the house is still in livable shape and is current on taxes/has no code violations.

For simplicity sake, lets presume I'm using all my own cash for the purchase and rehab, no bank requirements for general contractors, inspections for draws etc. Also, I would not do some large change like add a bathroom or an addition that would change the particulars on the tax record. 

My question is, given that no government agency knows how bad the property currently is, are permits necessary?  As far as I can tell, the bank's appraiser will want to see before and after pictures that show that quality work was performed, but does that mean reviewing permits?  Is there a need to re-certify and get a certificate of occupancy?

Note: I'm not saying I would cut corners, do shoddy work or skip having work done by professionals, I am simply hoping to avoid government expense and red tape.  Certain big items, such as complete AC replacement, require a permit inspection in my county. 

Thanks for any advice.