How knowledgable do I have to be when I start a phd?
It is very appreciated for your honesty. In my knowledge, I have seen many students they join PhD courses having very little knowledge in their field. Also, many join in new fields without having any proper/concrete ideas. However, their interest to learn, hard work and self confidence all together help them to achieve a PhD and a great career ahead. It is also worth to mention that each PhD student must face lots of ups and downs. However, their self confidence and interest to do something new helps to overcome all the down situations. 

So first of all, you should never loose your self confidence at the very beginning. It is very well said that "it is never too late to start". You will get enough time in PhD to learn many new things including your objectives. Moreover, it seems you have got a very good and inspirational professor. So there is no doubt whatever knowledge you have now, it is very much enough to pursue a PhD in your area of interest. Good Luck!!