In a small saucepan over lowest heat setting, add butter and allow to melt. Add in milk, water, sugar and salt. Heat to 105-110 degrees, stirring constantly.
Transfer liquid to bowl of stand mixer (or large mixing bowl if kneading by hand). Make sure your liquid isn't too hot or it will kill your yeast.
Stir in yeast and let sit for 5 minutes, or until frothy.
Add in one cup of flour and stir. Add in second cup, stir again. Continue adding flour little bits at a time, up to another 1/2 cup, until a sticky dough starts to form.
Put dough hook on stand mixer and allow to knead for 5 minutes. Remove bowl from stand mixer, leave dough inside, and cover with plastic wrap or tea towel. Allow to rest for 10 minutes.