Q: How do you create a folder to store downloads?

On an iPad? You don't.

Apple devices don;t have a file structure that is visible like in Windows or a Mac. Each app that has data stores it in a unique way for that app.

You might want to consider Dropbox as a possible solution. Not every app will allow you to open a file from wherever you wish.

If you download by email hold your finger on the attachment then chose where you want to store it. As LACAllen has already said you have to save the attachment somewhere.

Glad to help. As a new user can I recommend downloading the User Guide. It will download to the iBooks app. It's differcult reading but great for reference.

iPad User Guide for iOS 9.2 by Apple Inc.

https://itun.es/us/U4OT9.l

You can use an app like Documents by Readdle to store downloads.