There is solution for you problem (;.
I recently learned it on NVIDIA forums. There is external app you can use to paint cloth on your meshes. You must download APEX SDK from Support Center ( http://supportcenteronline.com/ics/support/default.asp?deptID=1949 )
Build 1.2.3 Physx3.2.3 Works with UE4.
After you unpack it Browser to /bin/vc10win32-PhysX_3.2 folder and you will find here ClothingToolCHECKED and ClothingToolPROFILE. They seems to be the same thing, although CHECKED seems to work more stable on my PC. There are also help files in docs folder.
I wonder why this tool is not more widely distributed on NVIDIA page and/or included with Unreal.
EDIT:
Keep in mind that this tool assume Y up. So if you happen to have you skeletal mesh in Z up and convert it to Y up for tool, you cloth with be completly messed up, as APEX will have no idea what have you done with axes. But don’t worry about it. This problem is also present in max/maya /any other software that using APEX and convert up axis.