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Tankless will not heat water ... preheat cold water using tempering tank
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Tempering tank Tempering tank for tankless water heater
Often tankless heaters are undersized to meet demand during cold weather.
Winter time, customer discovers tankless can not heat water fast enough, but increasing thermostat setting on tankless causes unit to shut down.

Tempering tank can solve problem by pre-heating water before it reaches tankless.
Some tankless will not activate if incoming water is above certain temperature: check manufacturer specs
Tempering tank
Tempering tank located in naturally warm area pre-heats cold water using ambient temperature
Locate tempering tank in sunny area in warm climates

Use old water heater or buy scratch-n-dent 20-30 gallon water heater. Do not connect electricity unless needed. Insulate tank and pipes.

Copper tubing can be used to make tempering reservoir. Copper lasts longer than steel tank <> 2.5 gallons per 100 feet of 3/4" tube.

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Where to get a tempering tank:
Typically, a tempering tank is the old water heater that you just replaced ...
Or a new 20-30-40-50 gallon electric water heater.

You can use a long coil of copper or pex pipe shown below. 

Other possible sources: ... as long as the tank is not rusted out.
Check craigslist for used water heater.
Check with a water well guy, and see if he has water well storage tank (without the diaphragm).
Check the plumbing company to see if they have old water heater.
Check at the recycle center.
Any tank rated for 60-80 psi potable water will function as tempering tank.
heat exchanger heat exchanger Make heat exchanger using lathe or manually wrap copper around PVC pipe.
Use pex pipe instead of copper

Copper tubing can be used to make tempering reservoir. Copper lasts longer than steel tank <> 2.5 gallons per 100 feet of 3/4" tube
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