The project is run by charity Community Self Build Agency (CSBA) and aims to provide homeless veterans with both accommodation and skills to help them find work.
Steven is one of 10 new residents who helped with everything from paving the car park to laying the bricks.
He spent the last two years sleeping rough in his car after his life fell apart when he left the army following 24 years in the military.
He told Sky News the experience had transformed his life.
Much of the furniture in the flat was bought with the help of charities as well as Steven's former regiment.
CSBA is now planning to repeat the build in other towns and cities across the South West and Wales including Weston-super-Mare and Plymouth.
National Development Director John Gillespie said: "It's allowed them the opportunity to go off and get trained in parts of employment, so they have got qualifications so that they can enter the workplace in a better position to earn more money than they did before."
There are no official figures for the number of homeless veterans in the UK, with some charities estimating one in 10 rough sleepers come from a military background.
Martin Field works for the charity Alabaré, which has been helping homeless across the South West since 1991.
He said the number of veterans being supported had risen 32% in the last year.
Mr Field told Sky News: "When there's a crisis, the support that they have come to rely on from the army isn't there any more and the army that's been their family for a while just doesn't exist and they can go down hill quite rapidly."
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