Most cities would frown on you building a shelter of any kind from scrap lumber or old metal, even if it's in your backyard. We have to bite the bullet and pay for materials that are approved, like new lumber and siding, so sometimes it's cheaper (and easier!) to buy kits or even sheds that only need screwing together. A power tool is handy for that, but a screwdriver works, too.
Where to put the shed is a problem in most back yards. It needs to be close enough to the back door to get to in a snowstorm if needed, but of course, we don't want it in the way visually. If we entertain in our backyards, we need it far enough away to not be part of the scene.
Along a side fence is usually the best place. Trees and other landscaping might limit your choices even there, so think carefully before building one. Stay away from low or wet areas, too. They're hard to move after that!