Start by preheating your air fryer to 380F (190C).
Combine the pancake mix, egg, milk, and water in a mixing bowl. Mix and stir until a thick batter forms. To make sure it isn’t watery, slowly add the liquid ingredients. Set aside.
Place 1-2 slices of cheese on top of the bread, then add 3-4 slices of ham, top with more cheese, and then with the second piece of bread.
Press down the sandwich and slide a toothpick on each side to keep it in place.
Dip the sandwich into the pancake batter- making sure to coat both sides well. Allow the excess batter to drip off before setting it on liner paper in the air fryer basket.
Air fry the sandwich for 6-7 minutes, then flip the sandwich over, and air fry at 350F for 1 more minute. Remove from the air fryer and pull the toothpicks out. Allow the sandwiches to cool down a bit, and then serve with powdered sugar on top.