From that water God formed the light to fill the darkness which He also created (Isa 45:7). The first day was the beginning of differentiations. Before the creation there was no differentiation (outside of God Himself and His indescribable tri-unity). On that first day God created things that were not. He created a space outside of Himself; He created darkness which had never been (Isa 45:7) for God is light and there is no darkness in Him whatsoever (I John 1:5). Thus the absence of His glorious light in the newly created void was new and different which is why the King revealed by the prophet Isaiah ‘I form the light and create darkness’. Until that moment darkness, (the absence of light) did not exist.
Therefore before day one (or Genesis 1:1) there was God and because He is light there was no such thing as darkness. When He created the void, space, it initially was devoid of God’s light and did not even have created photons. When God said ‘let there be light’ is the moment when God created the particle-waves known as photons.
We can see, therefore, that before the creation of a domain and substance, there was no place even for the angels. Their creation is not clearly detailed like the creation of Adam, however we can piece together some clues from the book of Job: “Where were you when I laid the
foundations of the earth?…Who determined its measurements? …Or who stretched the line upon it? To what were its foundations fastened? Or who laid its cornerstone, when the morning stars sang together, and all the sons of God shouted for joy?” (Job 38:4-7). Job 38 has day two in mind because the line had been stretched out upon it. The line (was pointed out to me, by a brother whose name I forget), is where day and night meet on the earth as seen from space – there literally is a line passing over it. The angels were obviously there and were observers of what God was doing while not dependent on the earth (like man would be). This is the earliest evidence we have of the angels. We hear nothing of them before this.
The next thing we have to consider is that before the fall of man there was only one domain in which the spiritual (angels, God) would exist with the physical (Adam). The one domain was split in two because of the fall of man. We know this because there is currently a veil between the heavenly domain/realm and the earthly. We learn this from Isaiah 25:7 which states that the veil, which covers all nations, is going to be removed. “And He will destroy on this mountain the surface of the covering cast over all people, And the veil that is spread over all nations. He will swallow up death forever, and the Lord GOD will wipe away tears from all faces…” (Isa 25:7-8). Isaiah also says “oh that you would rend the heavens and come down.” (Isa 64:1) We hear of the sky receding like a scroll in Isaiah 34 and Revelation 6. The prophets also saw the heavens open on occasion (Ezekiel 1, Revelation 4, 19). Stephen also saw the heavens open when he was being stoned (Acts 7).
We also know that Satan was in Eden, the garden of God, which was associated with the mountain of God (Ezekiel 28:12-18). That mountain is the same mountain that we read about in Isaiah 14, which Satan attempted to climb and sit upon the “mountain of the congregation.” It is also the same that is spoken of in Hebrews “But you have come to Mount Zion and to the city of the living God, the heavenly Jerusalem, to an innumerable company of angels.” (Heb 12:22). The mountain of God is in fact the heavenly Jerusalem according to this verse and others.
Therefore, the mountain of God was created when He created everything else and also that abode was in a common domain/dimension before the fall. God walked in the cool of the evening in the Garden of Eden, which is the same place wherewas – the mountain of God. Eden and the mountain of God are closely connected. This means that God’s abode and man’s were in the same domain and only split after the sentencing and casting out from the Garden with the way blocked to the tree of life. In other words, the casting out was not simply a spatial removal but a dimensional shift. The spiritual domain was divorced from the natural/physical at that point and those two will be recombined when the New Jerusalem comes down out of heaven and remains on the earth forever.
With all that in view we see that before the creation of the heavens and earth there was only God who existed in and of His own dimension. There was no other space out there, no black emptiness, no void –just God. There was only light for even darkness is something that He created (Isaiah 45:7). We also conclude that the traditional view of God dwelling “up there” and Adam being “down here” is not accurate. Nor is the belief that we will dwell “up there” in heaven for eternity. What we understand to be “heaven” in the Scriptures is in fact the Holy Mountain/Heavenly Jerusalem – which comes down to the earth in the age to come. So we conclude that only God existed before Genesis 1:1; the angels did not exist before then. The current separation of God’s domain from man’s is only a temporary condition which was not in place when God declared everything to be very good. As for the angels, they were therefore created after the heavens and earth of Genesis 1:1 (day two appears to be when they were created) and they were dwelling in the same domain as man until the separation of the two domains. God’s original intent was to dwell with His creatures on the earth. Corruption (sin) and death impeded that intent for several thousand years. Nevertheless, God will bring His original intent to pass and will dwell with mankind forever from His holy mountain, which will be on the earth – a place in which God, angels, and man will all dwell together.
 “The disjunctive clause (conjunction + subject + verb) at the beginning of v. 2 gives background information for the following narrative, explaining the state of things when “God said…” (v. 3)…. Some translate 1:2a “and the earth became,” arguing that v. 1 describes the original creation of the earth, while v. 2 refers to a judgment that reduced it to a chaotic condition. Verses 3ff. then describe the re-creation of the earth. However, the disjunctive clause at the beginning of v. 2 cannot be translated as if it were relating the next event in a sequence. If v. 2 were sequential to v. 1, the author would have used the vav consecutive followed by a prefixed verbal form and the subject.” NET Bible Notes on Genesis 1:2.
 “That is, what we now call “the earth.” The creation of the earth as we know it is described in vv. 9-10. Prior to this the substance which became the earth (= dry land) lay dormant under the water.” NET Bible Notes on Genesis 1:2.