Preheat your oven to 350 degrees Fahrenheit. Grease and flour your Bundt pan well to prevent sticking; you can also use baking spray for convenience.
In a microwave-safe bowl, melt the chocolate chips. Heat them at 20-second intervals, stirring in between until they are smooth and melted. Set this mixture aside to cool slightly.
In a large mixing bowl, beat together the softened butter and light brown sugar using an electric mixer for about 5 minutes until it is well blended and fluffy.
Add the eggs one at a time to the butter and sugar mixture, making sure to beat well after each addition until fully incorporated.
Next, pour in the melted chocolate, mixing just until everything is combined. You want a smooth batter without over-mixing.
In another bowl, sift together the all-purpose flour, baking soda, and salt. Gradually add this dry mixture to the chocolate batter, alternating with the sour cream. Beat on low speed just until everything is blended together.
Slowly add the hot water into the batter, mixing on low speed until it's smooth and well combined. This will help to thin the batter to the right consistency.
Stir in the vanilla extract until fully incorporated. The batter should be glossy and thick at this point.
Pour the batter into the prepared Bundt pan, spreading it evenly. Bake in the preheated oven for 55 to 60 minutes, or until a wooden pick inserted in the center comes out clean.
Once baked, allow the cake to cool in the pan for about 10 minutes. Carefully remove the cake from the pan and transfer it to a wire rack to cool completely.
For the frosting, beat the softened butter and caramel sauce together until creamy. Gradually add the powdered sugar, mixing until smooth. If needed, add heavy cream or milk to achieve your desired consistency.
Spread the frosting over the cooled cake, making sure to cover it evenly. Top with the toasted coconut and drizzle with additional caramel and hot fudge sauces for an extra treat.