I am having a hard time figuring out process to go from the dev board to creating a custom PCB. Do I need to first just buy all components individually and build out on breadboard to get a schematic?
No, most schematics are created in software with Eagle or something similar.
http://www.cadsoftusa.com/
I have yet to make the leap into designing my own boards.
For example I'm using a wi-Fi shield for my project. So if I want to use this in my schematic would I need to buy a bare wifi module so that I can physically see the connections and other components (resistors, capacitors, etc..) and transpose onto the schematic?
Many open source items have posted schematics, you can copy portions of the design as a starting point for your design.
I've used kicad, which seems great, I haven't used any other before tho
basically 3 steps to make a custome pcb(atleast in kicad)
the shematic has all the connections to the components and ics
then the footprints are chosen, (dip, soic, resistor sizes etc)
then you layout the actual components, usually In a way that makes it simple to route
That's basically it for designing a pcb, then you can send it batchpcb or whichever fab house you like to produce it
eagle is 2 design steps, altho it sounds like more.
select parts from libary, which includes footprint symbol.
make all your connections.
Then create board (up to 80 x 10mm in free hobby version) & place the symbols, let it autoroute, or route it by hand until all the rubber bands go away.
Run the CAM processor to make the Gerber files to send to a board maker.
But OP seemed more concerned with capturing the schematic to start.