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Over medium-low heat, melt sugar until it caramelizes.
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Pour the caramel into a flan dish to coat bottom.
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Beat eggs until foamy.
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Add sweetened condensed milk, then milk, and finally the coconut and vanilla.
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Mix well with each addition.
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Pour mixture into flan dish.
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Place flan dish into an oven-proof dish, and add water (enough to come up to the top 1/3 of the flan dish).
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Bake at 325ºF for approximately 1 hour, or until a knife inserted in center comes out clean.
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Allow to cool, and refrigerate.
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Serve cold with fresh whipped cream.
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May be refrigerated up to 3 days.