I've attached detailed scale plans for my folding futon. I think I'd only attempt to build it if I had access to a good Skilsaw for cutting, a tape measure, a power drill with a long 1/2" spade bit and phillips bits, wood screws, a wood rasp/file or power sander for finishing, and some experience building simple stuff from wood.
I build everything from ordinary pine, in this case eight foot 2x4's, which seem pretty marginal for this sort of application, but they work. They should be about $3 each at any big hardware store; you need seven 2x4s plus one eight foot 2x8, which will probably run $30. Counting the rope and misc hardware, you're at $50. A futon pad (the bare rope isn't very comfortable) is another $100 or so, unless you can scrounge one up.
The back of the futon folds down, by removing the top two bolts. It's quite tippy in the folded-down configuration: you really need to block up the folded-down side, or make some small legs that fold down too.
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