Relocate water heater into middle of the line ?

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fivespeedv8

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I would like to replace my electric water heater with a high efficiency gas unit, and it would be easier to plumb the exhaust vent if I move the water heater to a different spot inthe house. Right now it is plumbed so that the it is the last thing along the main supply and the output then goes in series back to each fixture.

Can I move the water heater so that it becomes TEE'ed into the middle of both the supply and hot water main lines? That means some fixtures would be tapped off main lines before the water heater and some after. Are there any consequences of that? (actually, it seems to me that might have been the better way to do it anyway). Crude before/after diagram attached.

thanks for any replies.

Lou

waterheaterplumbing.jpg
 

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