@Huwareyou It's not exactly a linear process, but I can reveal my process a bit
First off I pick a font, there's plenty of sites out there that provide free fonts, but make absolutely sure that they're completely free and not "for personal use only".
Next, take notes! Look at tf2's sign overlays, what do you like about them? What do they do? How are they formatted? This particular sign is a mishmash of multiple ingame signs with unique wording.
At this point you're gonna need a graphic design software, GIMP is free and very useful, I would very much recommend.
For wear and brush strokes, tf2 uses mostly square brushes for their sign overlays to mimic a broad, rectangular paintbrush. Wear should be "realistic" in a way, mistakes and such. No sign is perfect. Little imperfections with a little exaggeration go a long way. Faded paint should be present but not *too* present, just enough to show that the paint is faded in some areas. And last of all, it's good practice to make the signs ever so slightly transparent, it makes it a tad more weathered and not stick out too much.
And of course, most importantly, practice! Go out and make some overlays, eventually you'll make something great.
