Hot Water Problem

[rodss67]

I have a thankless gas water heater on my home. I also have a small hot water heater mounted inside the house above the washer/dryer which is located on the inside wall from the water heater. I have instant hot water when I turn on the faucets. Now when I turn on the faucett I have to wait a bit for the hot water to come out. I went outside and turn on the bib below the hot hot water heater and the burner kicks on and the water comes out hot. What is going on with the delay. Last night it was about a 2 minute wait for the shower water to heat up. It started out cold and graduated up to hot.
Thanks!

I felt the recirculating pump and it feels like it is running.

 

[breplum]

That small electric water heater inside the house probably has an element that has gone out.
We used to do that same layout utilization for faster hot water until Navien A series came out with the mini-tank built right in to the case of the tankless.