Your first step is to make a New Document. You can do this by going to File > New.
Next, select the Type tool from the toolbox to your left.
Now you are free to enter the phrase and resize the image to your liking. If you want to make the font larger, you can go to the Selection Tool by clicking on it or by pressing V. then click on one of the resize point and drag. To keep the same ratio of the font while resizing, press Shift then drag. In this example the original font size was 12, and then I click on the bottom-right handle, Shift + drag the font.
Then right click on the font and select Create Outlines.
This will turn into individual letter into selection points.
Now right-click again and select Ungroup. This will make all the letters separate of each other to edit / transform.
Now select the Direct Selection tool or press A.
Now your letter/character is ready to be edited.
Click on one of the points and start manipulating.
Check this out while you wait!