You can sculpt it in a software like Zbrush or you can use Marvelous Designer, i recommend this complete course from CGElves: https://cgelves.com/courses-workshops/mastering-marvelous-designer/ For Zbrush there is this tutorial here on Lynda: https://www.lynda.com/ZBrush-tutorials/ZBrush-Learn-Sculpt-Cloth/419362-2.html
Hi! :) I don't know how to make this in Zbrush but If you're going to use Marvelous Designer, you could 'cheat' by creating a torn texture with an opacity map. I made some free tutorials on how to make torn edges and holes in MD: https://cgelves.com/free-marvelous-designer-tutorials-how-to-make-tattered-zombie-clothes/…
Either way, Marvelous will only get you most of the way there. You'll still need to do some work in Zbrush, so both of these will be helpful. Also, retopology will be a big part of the workflow if it's production assets you're creating.
Yeah if you are just starting out it can seem impossible. It's like asking how long a piece of string is. There are lots of ways to model what you need and it depends on what you intend to use the model for. A combination of ZBrush and Marvelous Designer is popular at the moment. Here is a screen cap I made years ago…