Learn Hardcore Indonesian: Garasi itu sempit, jadi bensin cadangan disimpan di luar. - That garage is narrow, so spare gasoline is stored outside.

In Indonesian, putting itu after a noun marks that noun as specific (roughly like English the/that). So Garasi itu means that/the (known) garage.
Starting with Itu usually makes it a demonstrative subject: Itu garasi = That is the garage. Itu garasi sempit is ungrammatical/natural only as two sentences: Itu garasi. Sempit.
To say That/This garage is narrow, use Garasi itu sempit (that) or Garasi ini sempit (this).

Where is the verb “to be”? Why isn’t there adalah in Garasi itu sempit?

Indonesian doesn’t use a copula before adjectives. Sempit itself is the predicate, so Garasi itu sempit is complete.
Use adalah mainly to link two nouns: Garasi itu adalah ruangan untuk mobil. Avoid Garasi itu adalah sempit.

What nuance does sempit have? Is it just “small,” like kecil?

Sempit = narrow/cramped (focus on lack of space or width).
Kecil = small in overall size (object or place is small).
So a garasi kecil is a small garage in general; a garasi sempit feels tight/cramped (maybe long but narrow). Antonyms: luas, lega. Related: sumpek (stuffy), penuh (full).

How is jadi used here? Can I use karena, sehingga, maka, or makanya instead?

Here jadi means so/therefore and introduces a result. Alternatives:

Karena (because) introduces the cause: Karena garasi itu sempit, …
Sehingga (so that/as a result) follows the cause: Garasi itu sempit, sehingga …
Maka is formal: Garasi itu sempit, maka …
Makanya is colloquial: Garasi itu sempit, makanya …
Note: jadi can also be a discourse opener (So, …) or a verb (become) in other contexts.

Why is the passive disimpan used? Could I say Kami menyimpan bensin cadangan di luar?

Yes. Active: Kami menyimpan bensin cadangan di luar. Passive: Bensin cadangan disimpan di luar.
Passive is common when the agent is generic/irrelevant, and it foregrounds the thing affected (here, the fuel). Both are natural.

How do I include the agent in the passive? Do I need oleh?

You can add an agent: Bensin cadangan disimpan oleh kami di luar.
In everyday Indonesian, you can also say Bensin cadangan disimpan kami di luar (no oleh). Another very common option is Passive Type 2 (no di-): Bensin cadangan kami simpan di luar.

Why is di luar written as two words, but disimpan is one word?

di as a preposition (location: in/at/on) is separate: di luar, di rumah, di meja.
di- as a passive prefix attaches to a verb: disimpan, dibawa, ditutup.
Rule of thumb: if it answers “Where?”, di is separate; if it makes a verb, di- is attached.

What’s the difference between di luar, keluar, and ke luar?

di luar = outside (location): disimpan di luar.
keluar (one word) = to go out/exit (verb): Dia keluar.
ke luar (two words) = to the outside (directional phrase), used occasionally with a movement verb: Bergerak ke luar ruangan.

In bensin cadangan, which word modifies which? Can I also say cadangan bensin?

Indonesian compound nouns are head-first. Bensin cadangan = spare/reserve gasoline (type of gasoline).
Cadangan bensin = a reserve/stock of gasoline (a quantity you’ve set aside). Both are correct but not interchangeable in meaning.

Is bensin countable? How do I say “a can of gas,” “some gas,” or “two liters of gas”?

Bensin is a mass noun. Use measures/classifiers:

Some gas: sedikit bensin / sejumlah bensin (formal).
Two liters: dua liter bensin.
A (jerry)can of gas: sejeriken bensin (most natural), or satu jeriken bensin.
If it’s literally in a bottle/can: sebotol/sekotak/sekali̇ng?—but for fuel, jeriken is the usual container.

Could I drop itu and just say Garasi sempit?

Grammatically yes, but it sounds generic or note-like (A/the garage is narrow, in general). Garasi itu sempit points to a specific, known/visible garage. Use ini/itu when you mean this/that particular one.

What about Garasinya sempit? How is that different from Garasi itu sempit?

Garasinya sempit often means the (contextually known) garage is narrow; -nya can mark definiteness or possession (his/her/their).
Garasi itu sempit explicitly says that/that specific garage is narrow (with a demonstrative feel, often something you can point to).
Context decides whether -nya is definiteness or possession.

Can I use tersimpan instead of disimpan?

Yes, with a nuance shift:

disimpan highlights an action done by someone (is kept/stored [by someone]).
tersimpan describes a state/result (is in a stored state).
Both work here; disimpan is a bit more agentive.

Any punctuation rules with jadi? Can I start a sentence with it?

When jadi connects two clauses, a comma before it is common: …, jadi …
At the start of a sentence as a discourse marker: Jadi, … (comma after it). Both are frequent in writing and speech.

Would it be clearer to say di luar garasi or di luar rumah instead of just di luar?

If context already makes it obvious, di luar is fine. To be explicit, add the noun: di luar garasi, di luar rumah, di halaman, etc.

How are these words pronounced?

Approximate English-like cues (Indonesian vowels are pure and stress is light):

garasi: ga-RAH-see (r tapped)
sempit: sehm-PIT (e as in bed; t unaspirated)
bensin: BEN-seen
luar: LOO-ahr
disimpan: dee-SEEM-pahn
jadi: JAH-dee

What’s the difference between jadi (conjunction), jadi (verb), and menjadi?

jadi (conjunction) = so/therefore: … , jadi …
jadi (verb) = to be done/turn out: Kue-nya sudah jadi.
menjadi (verb) = to become: Dia menjadi guru.
Same spelling, different functions; context makes it clear.