Preheat oven to 350 degrees F.

In a heavy-bottomed saucepan over medium to medium-low heat, combine sugar and water.  Swirl pan to combine sugar and water.  Use a pastry brush dipped in water to brush crystals down off of pan sides if necessary.  Cook until sugar is melted and caramel is golden, about 15-20 minutes.  Remove pan from heat and immediately pour into the bottom of an ungreased 2-quart round casserole dish. Swirl caramel to evenly coat the bottom of the dish.  Set aside to cool,

In a bowl with a hand-mixer, beat cream cheese to loosen and smooth it.  Beat in the eggs until evenly and thoroughly combined.  Add and beat in sweetened condensed and evaporated milks and vanilla until smooth.  Pour over caramel in round casserole dish,

Place dish in a larger baking pan and into oven.  Pour boiling water into larger pan, up to 1-inch deep around the casserole dish.  Bake for 50 to 60 minutes until center is set, but slightly jiggly.  Remove pans from oven.  Place round casserole dish on a rack to cool for at least 1 hour.  Cover and refrigerate overnight, or up to 10-12 hours before serving.

To serve, run a sharp knife around the edges of the pan, and invert the flan onto a rimmed serving dish.  Cut into wedges and spoon caramel sauce over the top.   Store any uneaten flan covered in the refrigerator for 2-3 days.