Need help with creative sale

[Maxwell Lee]

Flipping a large house on a large lot with a separate garage+living unit that is unlivable. I have had a buyer, since the very beginning, and in fact have had the house rehabbed to a small degree with them in mind. I would really like to sell to them because they are willing to pay a little over market price and without an agent. They REALLY want the house. Listed at $240k. 

The problem is that their lender is not willing to finance the property with an uninhabitable garage. On top of that their insurance costs came in higher than expected and changing lenders would also likely significantly increase their payments as they have a very good relationship and offer with their preferred lender. 

My short-lived solution was to subdivide the lot, sell them the main house and offer them a contract to buy the garage in 6-12 months. This suited the buyer perfectly and allowed them the financial flexibility to make it work. And if something fell through I have no issue building a new house on the back lot which well definitely sell for a decent profit. But the city quickly killed my entire plan, informing me that if I subdivide I must build a new house. The current garage would not qualify as a main dwelling unit. 

Sooo....what can we do?? Is there any way to sell a partial lot with the rest of the lot transferring 6 months later? They only need a little bit of extra time. As for my end...I am willing to be flexible to sell to this buyer, but I need to get at least 50-100k back out of this property soon. TIA!