Mix the grated coconut with the warm water in a large bowl. Scoop the coconut into a sheet of cheesecloth and squeeze over the bowl to express as much coconut juice as possible; repeat a few times until you feel you've gotten as much as you can from the coconut; strain into a non-stick skillet. Discard the coconut.
Bring the liquid to a boil and cook until the mixture is dry, about 20 minutes; it will curdle as it dries, leaving coconut oil and the solids, which are called 'latik.'
