In a Dutch oven, heat the olive oil over medium heat.
Add the bell pepper, onion, ham, and sausage, and cook until the vegetables are tender and the sausage is browned.
Stir in the garlic and cook for 1 minute, or until fragrant.
Pour in the water and milk and bring the mixture to a boil.
Stir in the grits and seasonings, then return to a boil.
Cover, reduce the heat to low, and simmer for 5 minutes, or until the grits are tender.
Add the shrimp and cook for 3-4 minutes, or until the shrimp are pink and fully cooked.
Stir in the cheese, green onions, and hot sauce until the cheese is melted and everything is well combined.
Serve immediately and enjoy!