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creating vms when the system allows you only one vm

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hi'

 I am dual booting windows 7 and windows server 2012.  I created one virtual machine under windows server 2012. But, after that I could not create two other virtual machines I am required to create on my assignment. The reason is disk space.

I can create 35 GB unallocated resource from my C: drive which has 160 GB available. But, it would not allow me to format it with new simple volume, and I can't make the space primary (already there 4 primary disk space). it says logical.  It has star where it supposed to have volume drive. when I tried to use this unallocated space to install  windows server operating system, in the middle of the process, it stops and says "out of disk space". I tried several times, with same result.

How can I create my other two virtual machines? Is there a way to go around this problem.


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