System restore: an error occurred while preparing the installation

I bought a used mac mini on ebay, the guy who sent it to me completely formatted it, leaving only recovery partition.

Now when I boot the recover, I see 4 options, one of them is reinstall the OS. When I pick it I see that my computer will be verified with apple if eligible. Then a message "An error occurred while preparing the installation. Try restarting the application" shows there.

How can I see more verbose error? What is wrong? Is there some log or any way how to debug this? The OS I am trying to install is Yosemite, which was last OS installed on this Mac so it should work just ok.