Prepare the caramel sauce: In a medium saucepan over medium heat, add the sugar and water. Stir gently until the sugar dissolves, then stop stirring and allow the mixture to come to a boil. Let it cook for 4-5 minutes, or until it turns into a deep amber color. Be careful not to burn it.

1. Add the cream and butter: Once the caramel has reached the right color, carefully add the heavy cream and butter. Stir until smooth. Remove from heat and set aside to cool slightly.
2. Prepare the flan mixture: In a large mixing bowl, whisk the eggs, sweetened condensed milk, evaporated milk, granulated sugar, and vanilla extract together until well combined. Be careful not to overmix to avoid creating too many bubbles.
3. Caramelize the flan dish: Pour the caramel sauce into the bottom of a round or oval baking dish (or individual ramekins). Swirl the dish to coat the bottom evenly with the caramel sauce.
4. Bake the flan: Pour the flan mixture over the caramel layer in the dish. Place the baking dish in a larger pan and fill the outer pan with hot water until it reaches halfway up the side of the flan dish. Bake in a preheated 350°F (175°C) oven for about 50-60 minutes, or until the flan is set but still slightly jiggly in the center.
5. Cool the flan: Once done, remove the flan from the oven and let it cool to room temperature. Place it in the refrigerator to chill for at least 4 hours, preferably overnight.
6. Serve: To serve, run a knife around the edge of the flan to loosen it. Place a plate over the top of the baking dish and invert it to release the flan. The caramel sauce should spill over, creating a beautiful glaze.