I was totally gonna do the bed-in-a-closet thing, but I LOVE the idea of this! I have a corner that is going unused and, with a little planning, could accommodate a fort/sleep space for my nephew/maybe be a reading nook for me.
DIY BASEMENT BOHO: Imagine this in your basement. Can you see yourself plopping down on one of those floor pillows playing some hippie music? The fabric on the ceiling would hide all the plumbing and insulation. Fabric could also cover walls.