Made offer on 4 houses/rejected/How high to go

[Ward Conville]

Hello,
My first post here. I have been very pleased with the discussions I have seen on this site. I am a part time investor with 11 SFH and 1 duplex. I made an offer on a set of 4 houses for $154,000. Seller rejected offer and refused to counter, says I was too low. He has them listed for $204,000. Gross rent on the four is $2900/month.
I have private money lender in place who will give me loan for full purchase price at 5% interest only with a 5 year balloon. I think the FMV of the houses is probably $180,000. With the nothing out of pocket on the purchase, giving me an infinate cash on cash return. I estimate net profit here of $1000-1200 a month after interest only mortgage payment.
I am tempted to pay what it takes to get this deal done, up to $180,000. Am I missing something here?