It is possible to have an environment with an external engine (physical one or as a virtual machine in an external env) and then use a host as the only hypervisor

If the storage component has to be provided by that host itself you have to use local storage based datacenter and storage domains as well:

If you want to retain the default datacenter created during installation, you have to edit it and set it as "Local" in "Storage Type" section.

Or you could create  a new DC with that setting

There is also the option to install with Self Hosted Engine and use shared storage (NFS, SAN, iSCSI,...) if you have one available:

Or with the same guide use the host storage itself, but as GlusterFS and eventually extend it later if/when available with other hosts

Of course in that case you loose all the HA functions available at host level

HIH,

Gianluca