Learn Hardcore Swedish: Mellan huset och gatan finns en liten butik. - Between the house and the street there is a small shop.

Swedish main clauses follow the V2 rule: the finite verb must be in the second position. The sentence starts with an adverbial phrase Mellan huset och gatan (Between the house and the street), so the verb finns has to come next, and the noun phrase en liten butik follows it. Compare:

Det finns en liten butik mellan huset och gatan. (Default order with dummy subject det.)
Mellan huset och gatan finns (det) en liten butik. (Place phrase first ⇒ verb in second position.)

Do I need to include det, as in det finns?

It’s optional here. All of these are natural:

Det finns en liten butik mellan huset och gatan.
Mellan huset och gatan finns det en liten butik.
Mellan huset och gatan finns en liten butik. Using det is very common and neutral in speech. Omitting det is also correct and can feel a bit more written or concise.

Why use finns instead of är?

finns (from finnas) expresses existence/availability, the equivalent of English there is/there are: Det finns en butik…
är (to be) expresses identity or description: Det är en butik (That/It is a shop). It’s not used for existential there is-sentences. For location of buildings/places, Swedish also often uses:
ligger: Det ligger en butik mellan huset och gatan.

Could I use ligger instead of finns here?

Yes. Mellan huset och gatan ligger (det) en liten butik. Using ligger emphasizes physical location (where something is situated). finns emphasizes existence/availability. Both are fine for a shop’s location.

Why are huset and gatan in the definite form?

They refer to specific, known items, so Swedish marks definiteness on the noun:

ett hus → huset (neuter definite adds -et)
en gata → gatan (many en-words ending in -a add -n) If you mean any house and any street, use indefinite: mellan ett hus och en gata.

What grammatical gender are hus, gata, and butik?

hus is neuter: ett hus, definite huset, plural hus, definite plural husen.
gata is common gender: en gata, definite gatan, plural gator, definite plural gatorna.
butik is common gender: en butik, definite butiken, plural butiker, definite plural butikerna.

Why is it liten and not litet, lilla, or små?

The adjective liten is irregular:

Common gender, indefinite singular: liten (en liten butik)
Neuter, indefinite singular: litet (ett litet hus)
Definite singular (both genders): lilla (den lilla butiken)
Plural: små (små butiker)

How do I negate this naturally?

Use the negative determiner ingen/inget/inga with existentials:

Det finns ingen liten butik mellan huset och gatan.
Mellan huset och gatan finns det ingen liten butik. Use ingen for en-words (e.g., butik), inget for ett-words, inga for plurals. The bare inte en/ett sounds odd in this context.

Is En liten butik finns mellan huset och gatan okay?

Grammatically yes: En liten butik finns mellan huset och gatan. But it’s less neutral because Swedish usually avoids starting an existential clause with a brand-new indefinite noun. Use Det finns… or put the place first, or use ligger:

Det finns en liten butik…
Mellan huset och gatan finns det en liten butik.
En liten butik ligger mellan huset och gatan. (okay if you want to foreground the shop)

How do I make the yes–no question?

Finns det en liten butik mellan huset och gatan?
Ligger det en liten butik mellan huset och gatan? Both are perfectly natural. With finns, you can also ask about existence in general: Finns det någon liten butik…?

Can I say affär instead of butik?

Yes. en liten affär also means a small shop. Nuance:

affär is very common and generic in everyday speech, but it also means business/deal depending on context.
butik can feel a bit more formal or specific (e.g., fashion boutique), but it’s widely used for shops in general. Definite: den lilla affären, den lilla butiken.

Does mellan always use och? What about pronouns?

Structure is mellan X och Y (between X and Y). Don’t use med here.
With pronouns, use the object forms: mellan dig och mig (not jag och du). You’ll also see the postposition emellan in set phrases like dem emellan, and the adverb däremellan (in between).

Any quick pronunciation tips for the words?

Approximate Swedish pronunciations:

mellan [ˈmɛlːan] (double l = long consonant)
huset [ˈhʉːsɛt] (Swedish u = fronted [ʉː])
gatan [ˈgɑːtan] (g is hard before a; long a)
finns [fɪns]
liten [ˈliːtɛn]
butik [bʉˈtiːk] (ti = [ti], not [ʃ])

Do I need the article en before liten butik?

Yes. Singular count nouns normally need en/ett in Swedish. So say en liten butik. Omitting the article (liten butik) is ungrammatical here. The article can be dropped with some mass nouns or set phrases, but not in this existential sentence.