Making Water:

Pretty easy to make water. Just make your brush and cover it with the nodraw texture and then apply a water texture to the top of the brush only.{Use Texture Application Tool)
*browse for textures filter word "nodraw" and filter word "water"
Add in a water_lod_control entity. This entity is needed to tell the engine when to make it fade from expensive to cheap water.

Then add in an env_cubemap entity and open the properties window for it, hit the "brush faces" line, click
on the pick button and then pick your water face. After you've compiled the map and while in game type in
"buildcubemaps" in console and restart map.

*NOTE: from Valve

Requirements for water:

To make it perform efficiently, water also has a collection of rules regarding its placement and usage inside of a map:

There may be only one water level height in a PVS (potentially visible set) if the water is expensive.

“Expensive” and “cheap” water may not be used simultaneously in the same PVS.

The water’s surface should never slope in the Z-axis; it should always be parallel to the horizon line in a map.

Water is created by applying a water material to the top-most surface of a brush, while covering the remaining faces with the tools\toolsnodraw material.

The water_lod_control entity controls the distance at which expensive water transitions into cheap water. (lod = level of detail)

Note: Water is not a brush entity, and should not be attached an entity. Water brushes included in any brush entity will not render correctly.