In Raleigh they just rip them down.

I don't remember the in's and out's of what FHA required on condition but I know small, usually easily fixed items like smoke detectors, chipping paint, misplaced downspouts are items that they will require.I would recommend getting a good idea of what they require and keep that in mind while looking.

This is what I would think as a minimum when I would walk through a house HVAC could be 5-10kElectric 2-3kPlumbing 2-3kKitchen 3-6kBath 1-3kInterior painting 2-5kDrywall ?  

Flooring, painting, drywall repair, etc. shouldn't need any permits.Anything that needs a license (HVAC, new electrical circuits, new plumbing, etc) or larger changes (like roof or siding replacement) is typically going to need one.

I've recently replaced the floor and the drywall in the bathroom and don't want to have to rip it up if i don't have to.So I bought a 12" rough in toilet not knowing the different(noob).

Second, the borrower should be paying every dollar of every part of the transaction...so what you should really consider doing is ripping this note up and using an attorney specializing in hard money/private money loans to draft a new note and deed from scratch at the borrowers expense.  

It was freshly painted, rennovated and clean.  

She all of the painting needed, and I did the rest. 

The asking price is $230K and the property would require very little rehab as all of the units have been upgraded within the past 2 years (new kitchens, bathrooms, paint and A/C units).

She started renovations by putting up drywalls in some of the rooms, but not paining them, the ceiling in the bathroom and the kitchen has paint peeling off.