You have to download all the sources and patches into the directory they're supposed to be in, then use
tar xvjf file
for bzip files
tar xvzf file
for gzip files
which unzips it to its own directory, then cd to that directory, then follow the rest of the instructions ...
if it says that you're supposed to use a separate directory during the instructions, you need to make sure that you make those directories, and cd to them before doing what's in the rest of the instructions. Pay close attention to which directories it says to make and where it says to be when you do things.
you first need to create a folder for each and everyone of the packages, then extract the packages to those folders
When you use tar
it will extract it to its own directory.
Before issuing the build instructions for a package, the package should be unpacked as user lfs, and a cd into the created directory should be performed. The build instructions assume that the bash shell is in use.