Make chocolate mixture: Mix cocoa powder, butter, and water in a small saucepan over low heat. NOTE: this will create a thick mixture
Add sugar and mix for 2 minutes or until the mixture becomes smooth and shiny.
Remove the chocolate mixture from the heat and cool. Add vanilla extract.
Mix together cake batter: mix softened butter and white sugar together until creamed. NOTE: typically takes 6 minutes at medium speed at high altitude.
Continue to mix and add 1 egg at a time.
Mix together flour, baking soda, and salt. Alternate adding milk and the flour mixture until the batter is smooth.
Pour in chocolate mixture to cake batter.
Preheat oven to 375 degrees. Prepare cake pans by covering them with softened butter and then add a light layer of flour over the butter. Pour the batter into the prepared pans.
Bake for 30-35 minutes. Cool the cakes for 10 minutes on a wire rack and then remove from the pans.