I scaled down to a ~550 sq ft unit a couple of years ago, but had an interesting realization a few months after moving in that the walk-through closet that leads to my bathroom (maybe 175 sq feet together) could theoretically work as its own micro-apartment. I closed the door, and started mentally fitting a bed, mini-fridge, microwave and hot plate, and desk into the space. It all fit, give or take a half a foot here or there, and assuming a bit of custom storage.

Admittedly, though, I must have limits for small living spaces. My favorite part of this exercise was opening the door back out into the rest of the apartment, upon which my studio suddenly felt palatial.

Probably not very as it really isn't all that small. It will basically be two rooms; the bathroom with shower, sink and toilet and then the living area with a bed that can be closed off to the rest of the room with a curtain or moveable wall. The rest of the room will be a small kitchen and living area. No laundry is planned so that makes it a bit easier and I don't have to store everything I own in the space. I will implement some storage solutions, but I'm not going to get crazy about it. Just simple things.

Will probably end up something like the wee house layout wise, though not as modern in design: http://www.weehouse.com/wee/

The building is pretty cool as it was originally an ice cream parlor in the 1950's. It was going to be demolished, but a group saved it and moved it to the current location and now I'm taking it over.

I actually got the building for free since I bought the commercial building in front of it (well, negotiated it into the deal so I call it free). The commercial building was built in the 1860's and also saved by the same group. It is pretty unbelievable - has an arched doorway in the back where the horse/wagon pulled in with supplies for the general store and tavern that were in the ground floor. I'm going to finish out an apartment upstairs and have two commercial spaces downstairs - one for my business and one to lease out.