friend two story on the lives in the corner house large My , .
My friend lives in the large, two story house on the corner.
My friend lives in the large, two story house on the corner.
The two story house on the corner is the one my friend lives in.
Try not to end sentences with a preposition, in this case, "in." Except in slang or colloquial terms, a preposition indicates a relationship to some object or place. The first two answers are better.
I hope this helps a little more. Thanks for asking.