Characterization of healthy versus pathological tissue in the peritumoral area is confounded by the presence of edema, making free water estimation the key concern in modeling tissue microstructure. Most methods that model tissue microstructure are either based on advanced acquisition schemes not readily available in the clinic or are not designed to address the challenge of edema. This underscores the need for a robust free water elimination (FWE) method that estimates free water in pathological tissue but can be used with clinically prevalent single-shell diffusion tensor imaging data. FWE in single-shell data requires the fitting of a bi-compartment model, which is an ill-posed problem. Its solution requires optimization, which relies on an initialization step. We propose a novel initialization approach for FWE, FERNET, which improves the estimation of free water in edematous and infiltrated peritumoral regions, using single-shell diffusion MRI data. The method has been extensively investigated on simulated data and healthy dataset. Additionally, it has been applied to clinically acquired data from brain tumor patients to characterize the peritumoral region and improve tractography in it.