I figured out a simple way to do this in model builder. Lets say you're are iterating over a few files to do a clip to all of them.
1) Create an interator for feature classes. Right click on it and make a variable for the workspace.
2) Rename the workspace bubble to "Workspace", and also right click on it and select "make parameter". This will prompt you to enter in the folder containing the files when your run the model as a tool.
3) add the clip tool. run a line from the "FeatureClass" output bubble of the iterator to the clip tool, and select input feature.
1) add in the "Create Folder" tool, and right click on it and create two variables from it, name and location.
2) make the name of the folder whatever you want it to be. I used "Output"
3) For the location: In my case I already had the folder where I wanted to output folder to reside. It was the main folder i used as the input for the iterator.Remember I renamed that to "Workspace". Now we can refer to that location by typing in:
into the location bubble for the create folder tool.
4) Now, you use the connector tool to draw a line from the output of the "Create Folder" tool (named "Output Folder" for me) up to the main iterator bubble). It will display a little dialog, pick the option "precondition". This will tell it that it needs to create the folder before running this section.
5) Finally, in the output of your clip tool, you can type:
The %Output Folder% references the output bubble of the folder that we created. the iterator creates a bubble called "Name" for you, so we referenced that by %Name%. Then I add a suffix to make it clear that it's an output from the clip tool.
I hope that helps!