Make the caramel sauce by pouring the sugar into a medium skillet or saucepan over medium heat, stirring constantly. The sugar will start to clump together and turn a light brown color. Continue stirring until it has fully melted into a syrup-like consistency and reaches a golden brown color, creating a caramel.
Working quickly, take the caramel off the heat and pour it into a 9-inch round cake pan, evenly coating the bottom of the pan. Set the pan aside to allow the caramel to harden.
While the caramel hardens, make the flan mixture by blending together the sweetened condensed milk, evaporated milk, cream cheese, eggs, and vanilla into a blender and blending until smooth.
Once the caramel has hardened, strain the flan mixture into the cake pan using a fine mesh strainer.
Cover the pan with aluminum foil and carefully place it in the middle of a large roasting pan or baking dish.
Prepare a water bath for the flan by pouring 4-6 cups of boiling water into the roasting pan, until it covers about 1-inch of the cake pan.
Carefully place the roasting pan in the center rack of the oven and bake for 1 hour.
Carefully remove the baking dish from the oven and take the cake pan out of the water bath. Remove the aluminum foil and check to make sure the flan is fully cooked. The flan should be slightly jiggly, like jello. If the middle of the flan is still liquidy, bake for an additional 10 minutes.
Allow the flan to cool at room temperature for 1 hour before refrigerating for at least 4 hours, but preferably overnight.
To serve, slide a knife along the edges of the pan to loosen up the flan. Place a plate on top of the flan, grab a hold of both the plate and the pan and quickly and securely flip it over so that the flan is now upside down. Carefully lift off the flan pan. Your flan should be sitting in the caramel on the plate.
Slice the flan and serve with the rich caramel sauce.
Notes
The longer the flan has to set in the fridge, it will have a better taste and consistency. Refrigerating overnight is preferred but needs a minimum of 4 hours. If the flan does not immediately come out of the pan when flipped over, quickly flip it back and place it in a large baking dish with warm water to gently melt the caramel and allow the flan to loosen up.
If you have some leftover caramel on the bottom of the pan after it's flipped, you can also place the baking pan into a larger pan with warm water to help melt the leftover caramel and pour any extra on top of the flan.